Money, growth and indeterminacy
Stefano Bosi
(University of Evry Paris-Saclay)
In this article consumers need money to reduce their transaction costs. We highlight the existence of indeterminacy under a constant money growth within an endogenous growth framework.
Real indeterminacy is avoided by an alternative monetary policy such as interest rate pegging. The residual price indeterminacy is also ruled out if this monetary policy is completed by a specific fiscal policy.
