Inflation, Unemployment, and Economic Growth in a Schumpeterian Economy*

Chu, Angus C.; Cozzi, Guido; Fan, Haichao; Furukawa, Yuichi

doi:10.1111/sjoe.12416

Cited by 11 publications

(8 citation statements)

References 91 publications

(161 reference statements)

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“…Huang et al (2020) and Zheng et al (2020) also consider the second-generation Schumpeterian growth model and con…rm that an increase in the nominal interest rate has a negative e¤ect on economic growth via the CIA constraint on quality-improving R&D. Interestingly, they …nd that an increase in the nominal interest rate has a positive e¤ect on economic growth via a CIA constraint on variety-expanding R&D. The intuition of this result can be seen from (21), which shows that a smaller number of products N gives rise to a higher growth rate g = ln z by increasing the amount of resources for the innovation of each product. 7…”

Section: Discussionmentioning

confidence: 99%

“…Therefore, they could not explore the implications of inflation on unemployment. Chu, Cozzi, et al (2021) incorporate equilibrium unemployment driven by matching frictions in the labor market as in Mortensen (2005) into the monetary Schumpeterian growth model. Then, they use the theoretical framework to explore the long-run relationship between inflation and unemployment.…”

Section: Inflation and Unemploymentmentioning

confidence: 99%

“…In summary, the CIA constraint on R&D implies a positive relationship between inflation and unemployment, whereas the CIA constraint on consumption implies a negative relationship between inflation and unemployment. Using U.S. data, Chu, Cozzi, et al (2021) consider a variable that captures financial constraints on firms (a proxy for the CIA constraint on R&D) and another variable that captures financial constraints on consumers (a proxy for the CIA constraint on consumption). They find that inflation has a positive effect on unemployment via the financial constraint on firms and a negative effect on unemployment via the financial constraint on consumers.…”

Section: Inflation and Unemploymentmentioning

confidence: 99%

“…Using U.S. data, Chu, Cozzi, et al. (2021) consider a variable that captures financial constraints on firms (a proxy for the CIA constraint on R&D) and another variable that captures financial constraints on consumers (a proxy for the CIA constraint on consumption). They find that inflation has a positive effect on unemployment via the financial constraint on firms and a negative effect on unemployment via the financial constraint on consumers.…”

Section: Inflation and Other Macroeconomic Variablesmentioning

confidence: 99%

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Inflation, innovation, and growth: A survey

Chu

2021

Bulletin of Econ Res

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In this survey, we provide a selective review of the literature on in ‡ation, innovation and economic growth. The relationship between economic growth and in ‡ation is a fundamental question in economics. Most studies in this literature explore this relationship in capital-based growth models. This survey reviews a recent branch of this literature on in ‡ation and innovation-driven growth. Specifically, we use a canonical monetary Schumpeterian growth model to demonstrate the e¤ects of in ‡ation on innovation and the macroeconomy via di¤erent channels. We …nd that the cash-in-advance constraints on consumption and R&D investment have drastically di¤erent implications on the macroeconomic e¤ects of in ‡ation.

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Section: Discussionmentioning

confidence: 99%

Section: Inflation and Unemploymentmentioning

confidence: 99%

Section: Inflation and Unemploymentmentioning

confidence: 99%

Section: Inflation and Other Macroeconomic Variablesmentioning

confidence: 99%

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Inflation, innovation, and growth: A survey

Chu

2021

Bulletin of Econ Res

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“…Moreover, financing of various types of contracts provided by BUS and UUS has reached 303. 5 Trillion Rupiah within the same period. 27.65% of total financing is allocated for working capital, another 21.87% is allocated for investment and the remainder is for consumption purposes.…”

Section: Introductionmentioning

confidence: 95%

The Effect of Investment Financing,non Investment and Consumer Price Index on Economic Growth in Indonesia :A Simulation Model Approach

2020

jcr

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This study aims to analyze the effect of Islamic finance and consumer price indexes on economic growth in Indonesia. This study was conducted in 33 provinces for 7 years from 2011-2017. The research model uses the panel data model. The result regarding Financing shows that Financing provided by Islamic Commercial Banks are very useful in promoting economic growth, especially if the proportion of investment financing is greater than non-investment. Research also shows that most Indonesian provinces are still in quadrants II, III and IV. It shows that the allocation of investment financing in each province is still relatively low. However, there is sufficient evidence that investment financing can improve economic growth. Furthermore, non-investment financing has a negative effect. Meanwhile, the consumer price index has a positive effect on economic growth in Indonesia. The recommendations of this study are government and related agencies should focus on increasing investment financing to increase a higher economy as well as it is necessary to control the Consumer Price Index.

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Effects of product and process innovation on growth and unemployment

Sasaki

2024

SN Bus Econ

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In economic growth theory, product and process innovations are critical factors contributing to technological progress. This study constructs an economic growth model that considers product and process innovations and theoretically investigates how these two types of innovation affect economic growth and unemployment rates. Using our model, based on Zagler (Int Rev Appl Econ 18:209–224, 2004), we obtain the following three main findings: (1) an increase in the efficiency of product innovation increases both the economic growth and unemployment rates; (2) an increase in the efficiency of process innovation increases the economic growth rate but does not affect the unemployment rate; and (3) a decrease in labor allocation to product innovation and an increase in labor allocation to process innovation in the R & D sector increase the economic growth rate and decrease the unemployment rate depending on the conditions. These findings suggest that to simultaneously raise employment and increase economic growth, we need not only a policy for fostering product innovation but also another policy to improve employment.

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Inflation, Unemployment, and Economic Growth in a Schumpeterian Economy*

Cited by 11 publications

References 91 publications

Inflation, innovation, and growth: A survey

Inflation, innovation, and growth: A survey

The Effect of Investment Financing,non Investment and Consumer Price Index on Economic Growth in Indonesia :A Simulation Model Approach

Effects of product and process innovation on growth and unemployment

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