This article explores the effects of monetary policy (inflation) in a Schumpeterian growth model with an endogenous market structure and distinct cash (or cash-in-advance, CIA) constraints on consumption, production, and two types of R&D investment—quality-improving and variety-expanding R&D. We show that the relationship between inflation and growth is negative if quality-improving R&D (incumbent) is subject to the CIA constraint, but positive if variety-expanding R&D (entrant) is subject to the CIA constraint. Inflation has no effect on growth as consumption or production is subject to the CIA constraint. In addition, the firm size may either increase or decrease in response to inflation depending on which type of R&D is constrained by cash. With all CIA constraints properly imposed, a likely scenario in our numerical analysis shows that a rise in inflation leads the growth rate to exhibit a decrease in the short run but an increase in the long run. Moreover, our welfare analysis shows that Friedman’s rule, in general, is not socially optimal.

中文翻译：

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通胀、市场结构和创新驱动增长，现金约束明显

本文探讨了货币政策（通货膨胀）在熊彼特增长模型中的影响，该模型具有内生市场结构和明显的现金（或预付现金，CIA）约束对消费、生产和两种类型的研发投资——质量改进和扩大品种的研发。我们表明，如果提高质量的研发（在职者）受 CIA 约束，通货膨胀与增长之间的关系为负，但如果扩大品种的研发（进入者）受 CIA 约束，则为正。通货膨胀对增长没有影响，因为消费或生产受到中央情报局的约束。此外，公司规模可能会因通货膨胀而增加或减少，这取决于哪种类型的研发受到现金的限制。正确施加所有中央情报局的限制后，我们的数值分析中可能出现的一种情况表明，通货膨胀率上升导致增长率在短期内下降，但在长期内增长。此外，我们的福利分析表明，弗里德曼法则一般来说并不是社会最优的。