Endogenous technological change: a note on stability

This paper demonstrates that the steady-state solution of the optimal-growth problem in Romer's (1990) model of endogenous technological change is globally saddle-point stable. Surprisingly, the proof of this result is trivial. Interest in the optimal growth path is justified by the fact that there is a (unique) combination of production and R&D subsidies by means of which the optimal growth path is attained as a market equilibrium.

MoreLess

Year of publication:	2000-04-14
Authors:	Arnold, Lutz G.
Published in:	Economic Theory. - Springer. - Vol. 16.2000, 1, p. 219-226
Publisher:	Springer
Subject:	R&D \| Endogenous growth \| Saddle-point stability \| Transitional dynamics

More details

Extent:	application/pdf
Type of publication:	Article
Notes:	Received: October 6, 1998; revised version: April 19, 1999
Classification:	O41 - One, Two, and Multisector Growth Models
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005753372