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Kei Hosoya
''Non-separable utility, wealth effects, and economic growth in a monetary economy''
( 2002, Vol. 15 No.10 )
This paper investigates the effects of wealth-enhanced social status using an optimizing monetary growth model with non-separable utility function between consumption and wealth. Within this framework, we first arrive a conclusion that, in the case of no wealth effects, an increase in the rate of money growth does not stimulate the steady-state growth rate. Moreover, in the case of existing wealth effects, we show that an increase in the rate of money growth has a negative effect on the long-run growth rate of the economy. This result is in sharp contrast with the typical conclusion of the relevant field.
Keywords: AK model
JEL: O4 - Economic Growth and Aggregate Productivity: General
Manuscript Received : Dec 18 2002 Manuscript Accepted : Dec 27 2002

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