CeBER WP No. 2019-04

Encontra-se publicado o Working Paper n.º 2019-04 do CeBER intitulado "Inflation Complexity and Endogenous Growth" dos autores Tiago Neves Sequeira, Pedro Mazeda Gil e Óscar Afonso.

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.

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