Governments' Inflation Policies May Boost Economy Short-Term, But Risks Loom Long-Term
This paper looks at how money, growth, inflation, and government policies interact in different economic models like Solow, Tobin, IS-LM, AD-AS, and Dixit-Stiglitz. The researchers created a new comprehensive model to study how these factors affect economic development over time. By simulating the model, they found that changes in certain parameters can impact the economy in the short term. The study suggests that government policies on inflation could have both positive and uncertain long-term effects due to the complexities of the monetary system. Overall, the research provides insights into how monetary and real variables interact in ways not fully explained by traditional economic models, shedding light on the dynamics of economic growth.