We introduce endogenous growth in an otherwise standard NK model with staggered prices and wages. Some results follow: (i) monetary volatility negatively affects long-run growth; (ii) the relation between nominal volatility and growth depends on the persistence of the nominal shocks and on the...

This paper presents a re-interpretation of a New Keynesian model with capital, where zero long-run output gap restriction is eliminated and a certain type of assumption regarding risk-less nominal interest rate is adopted