On Monetary Policy, Unemployment, and Economic Growth

Victor H. ROSAS MARTINEZ

Abstract


Abstract. Recognizing the possible relation between investments, economic growth and unemployment, and how there is not an established impact of an unlikely productive project failure on the secondly mentioned variables, we address such relation and asses theoretically the effect of different instruments of monetary policy on the mentioned macroeconomic indicators. To do this we build upon two models of economic growth considering the role of entrepreneurs, risk takers, and a monetary authority which is the average agent of the economy that is assumed to be aware of how the inflation can damage equally the individuals' life style, independently of their particular levels of income, finding that the impact of the monetary instruments depends on the behavior of the population, and endogenizing the money in circulation.

Keywords. Endogenous money supply, Expansive monetary policy, Inflation, Unemployment, Economic Growth.

JEL. E24, E51, E52, E58, O42.


Keywords


Endogenous money supply; Expansive monetary policy; Inflation; Unemployment; Economic Growth.

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DOI: http://dx.doi.org/10.1453/jeb.v3i2.851

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