Money and price dynamics under the gold standard in the neoclassical theory of growth | Zendy

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Money and price dynamics under the gold standard in the neoclassical theory of growth

Author(s) -

WeiBin Zhang

Publication year - 2018

Publication title -

lecturas de economía

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.137

H-Index - 6

eISSN - 2323-0622

pISSN - 0120-2596

DOI - 10.17533/udea.le.n90a02

Subject(s) - economics , growth theory , dynamics (music) , production (economics) , function (biology) , gold standard (test) , standard model (mathematical formulation) , demand curve , econometrics , mathematical economics , macroeconomics , keynesian economics , microeconomics , mathematics , physics , history , statistics , archaeology , gauge (firearms) , evolutionary biology , biology , acoustics

The purpose of this study is to determine money and price dynamics under the gold standard in the one-sector neoclassical growth model. To do this, a model is built upon a few approaches in the literature on dynamic economic theory. In particular, the production sector is based on the Solow model, the gold standard and price dynamics are founded on Barro (1979), and money demand is influenced by the traditional money-in-the-utility-function setup. The model integrates the ideas of these approaches within a compact framework. Through simulations, it is shown that the economic system is characterized by a unique unstable steady state. Also, comparative dynamic analyses regarding changes in some parameters are conducted.

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