Endogenous growth, monetary shocks and nominal rigidities

► We incorporate endogenous growth in a standard New Keynesian model. ► We show that monetary volatility negatively affects long-run growth. ► The source of nominal rigidities influences the effects of volatility on growth. ► Shock persistence and monetary policy affect the way uncertainty impacts on growth. ► A high degree of interest rate smoothing is detrimental to mean growth.