Social status, inflation, and endogenous growth in a cash-in-advance economy

Chang, Wen‐Ya; Hsieh, Yi-ni; Lai, Ching‐chong

doi:10.1016/s0176-2680(00)00011-2

Cited by 22 publications

(46 citation statements)

References 30 publications

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“…Chang, Hsieh and Lai (2000) show that the BGP growth rate in the CIA model with "AK" type production function and status seeking is:…”

Section: Cash For Consumption Onlymentioning

confidence: 99%

“…1 Stockman (1981) develops a cash-in-advance (CIA) model where both consumption and investment are liquidity constrained and shows that an increase in the money growth rate will lower the steady-state value of physical capital. 2 Social status is introduced into a CIA model by Gong and Zou (2001), Chang et al (2000Chang et al ( , 2003 and Chen and Guo (2009) in order to study how wealth-enhanced social status affects the impact of monetary policy on economic growth. 3 Gong and Zou (2001) and Chang et al (2000Chang et al ( , 2003 demonstrate that with the presence of social status, the money growth 1 However, Sidrauski (1967) argues that in an infinite-horizon, representative-agent model, money growth does not affect the steady-state value of physical capital.…”

Section: Introductionmentioning

confidence: 99%

“…2 Social status is introduced into a CIA model by Gong and Zou (2001), Chang et al (2000Chang et al ( , 2003 and Chen and Guo (2009) in order to study how wealth-enhanced social status affects the impact of monetary policy on economic growth. 3 Gong and Zou (2001) and Chang et al (2000Chang et al ( , 2003 demonstrate that with the presence of social status, the money growth 1 However, Sidrauski (1967) argues that in an infinite-horizon, representative-agent model, money growth does not affect the steady-state value of physical capital. 2 Based on a CIA model, Abel (1985) shows that monetary policies will not affect the steady-state value of physical capital if the cash-in-advance constraint is applied solely to consumption.…”

Section: Introductionmentioning

confidence: 99%

“…Note that endogenous growth is not exhibited in Stockman (1981) and Abel (1985). The effectiveness of monetary policy in an endogenous-growth CIA model is examined by Chang et al (2000), Suen and Yip (2005) and Chen and Guo (2011). rate will positively affect the level or growth rate of output if consumption is liquidity constrained.…”

Section: Introductionmentioning

confidence: 99%

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Social status, human capital formation and the long-run effects of money

Chen

2011

J. Econ.

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This study examines the effects of monetary policy in a two-sector cash-in-advance economy of human capital accumulation. Agents concern about their social status represented by the relative physical capital and relative human capital. We find that if the desire for social status depends only on relative physical capital, money is superneutral in the growth-rate sense. However, if the desire for social status depends on relative human capital, the money growth rate will have a positive effect on the long-run economic growth rate. Furthermore, an increase in the desire to pursue human capital will raise the long-run growth rate, but an increase in the desire to pursue physical capital will lower it.

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“…Chang, Hsieh and Lai (2000) show that the BGP growth rate in the CIA model with "AK" type production function and status seeking is:…”

Section: Cash For Consumption Onlymentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Social status, human capital formation and the long-run effects of money

Chen

2011

J. Econ.

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“…They examine how status has an impact on the effect of higher inflation (money growth) on the level of capital stock or on an economic growth rate, which has been one of the important issues in macroeconomics. Gong and Zou (2001) and Chang and Tsai (2003) deal with this issue in a neoclassical framework, while Chang et al (2000) and Guo (2009, 2011) tackle this issue in an AK framework. 2 In particular, concerning the AK model, Chang et al (2000) employ the Clower-Lucas-type CIA constraint and show that an endogenous growth rate and money growth are positively correlated.…”

Section: Introductionmentioning

confidence: 99%

Cash-in-Advance Constraint With Status and Endogenous Growth

Kaminoyama

Kawagishi

2017

Macroecon. Dynam.

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This paper explores a one-sector AK model with a cash-in-advance (CIA) constraint that itself depends on relative income, which implies status (we call this constraint the "CIA-status constraint"). The CIA-status constraint means that agents with higher income are more creditworthy and can make purchases with fewer money holdings. Under the Clower-Lucas-type CIA-status constraint, we show that the endogenous growth rate and money growth are positively correlated. On the other hand, under the Stockman-type CIA-status constraint, we confirm that the relationship between the endogenous growth rate and money growth changes from negative to positive when the elasticity of the CIA constraint with respect to status exceeds one.

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Population growth overshooting and trade in developing countries

Lehmijoki

Palokangas

2007

J Popul Econ

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This paper examines a developing economy by a family-optimization model in which the number of children is a normal good in preferences. Trade liberalization generates two effects: an income effect, which raises population growth in the short run; and a gender wage effect, which decreases that in the long run. With higher income, families invest more in capital. Because female labor is more complementary to capital, a higher level of investment increases women's relative wages and attracts more of them from child rearing into production. Consequently, the population growth rate falls below the original level in the long run. This paper also provides some empirical evidence on these results. Journal of Economic Literature: O41, J13, J16

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Social status, inflation, and endogenous growth in a cash-in-advance economy

Cited by 22 publications

References 30 publications

Social status, human capital formation and the long-run effects of money

Social status, human capital formation and the long-run effects of money

Cash-in-Advance Constraint With Status and Endogenous Growth

Population growth overshooting and trade in developing countries

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