announced open

Anticipated policy and endogenous growth in a small open monetary economy [An article from: Journal of International Money and Finance]
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This digital document is a journal article from Journal of International Money and Finance, published by Elsevier in . The article is delivered in HTML format and is available in your Amazon.com Media Library immediately after purchase. You can view it with any web browser.

Description:
This paper analyzes the effects of a preannounced change in the growth rate of credit in a small open economy. The model, based on an endogenous growth model, introduces the adjustment costs for investment and the role of money in the production function and highlights the dynamic behavior of an open economy. We show that an increase in the rate of anticipated credit growth lowers the steady-growth rate of capital, real money balances, and real output. We also find that the rate of depreciation of the domestic currency will rise steadily toward its stationary level. The anticipated domestic credit growth hence exhibits monetary nonsuperneutrality in both the rate and the level of output in the intermediate and the long run.