The paper presents a model in which the exogenous money supply causes changes in the inflation rate and the output growth rate. While inflation and growth rate changes occur simultaneously, the inflation acts as a tax on the return to human capital and in this sense induces the growth rate...

This paper analyses the implications of the evidence on micro price setting gathered by Price-setting Microdata Analysis Network (PRISMA) for inflation dynamics and monetary policy, relying on calibrated models and direct empirical evidence. According to models calibrated to the euro area micro...

The paper shows how increases in the inflation rate can cause the output growth rate to decrease by a lessor amount as the inflation rate rises. This is the so-called non-linearity in the inflation-growth effect. Our explanation helps show how model-based estimates of the inflation-growth effect...

This paper adds a credit services sector into a monetary endogenous growth economy in order to investigate the inflation-growth effect. We compare this economy to more standard models with respect to the effect of the money / credit exchange technology. We find a markedly negative effect of...

The paper presents a theory of the demand for money that combines a special case of the shopping time exchange economy with the cash-in-advance framework. The model predicts that both higher inflation and financial innovation - that reduces the cost of credit - induce agents to substitute away...