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https://hdl.handle.net/10316/87706
Title: | Inflation, Complexity and Endogenous Growth | Authors: | Sequeira, Tiago Neves Gil, Pedro Mazeda Afonso, Óscar |
Keywords: | inflation, endogenous economic growth, complexity effects, entropy. | Issue Date: | 23-Sep-2019 | Series/Report no.: | CeBer Working Paper 2019-04; | Abstract: | In this article, we argue that inflation increases complexity pertaining to knowledge production (or R&D). Then, we expand a recently developed complexity index based on entropy to include the effect of inflation. As a result of this new mechanism in an endogenous growth model, inflation is no longer superneutral. In the model, inflation can decrease economic growth in a nonlinear way, a sudden upward shock on inflation can severely hurt economic growth and an inflation cut can be responsible for a take-off. These effects are illustrated quantitatively. | URI: | https://hdl.handle.net/10316/87706 | Rights: | openAccess |
Appears in Collections: | I&D CeBER - Working Papers |
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