Gupta, RanganMakena, Philton2021-06-232021-06-232020-03Gupta, Rangan; Makena, Philton. 2020. 'Growth Dynamics, Multiple Equilibria, and Local Indeterminacy in an Endogenous Growth Model of Money, Banking and Inflation Targeting' Economies 8, no. 1: 22. https://doi.org/10.3390/economies8010022.2227-7099 (online)10.3390/economies8010022http://hdl.handle.net/2263/80582We develop an overlapping generations monetary endogenous growth (generated by productive public expenditures) model with inflation targeting, characterized by relocation shocks for young agents, which in turn generates a role for money (even in the presence of the return-dominating physical capital) and financial intermediaries. Based on this model, we show that growth dynamics emerge with a S-shaped growth path producing three equilibria. The low and high-growth equilibria are stable, but locally indeterminate, while the medium-growth equilibrium is unstable. Since, government expenditure is productive in our model, a higher inflation-target would translate into higher growth, but under multiple equilibria, this is not necessarily always the case.en© 2020 by the authors. Licensee: MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (http://creativecommons.org/licenses/by/4.0/).Endogenous growthInflation targetingGrowth dynamicsArticle