This paper examines the possibility of the existence of bubbles and their effects on the growth rate by using an endogenous growth model. A necessary and sufficient condition for the existence of steady-state equilibrium with bubbles is provided. If non-zero rates of the useless asset supply are...

This paper develops an endogenous growth model with productive public capital along with private capital in a spirit similar to that of R. J. Barro (1990). Since the authors' model includes two stock variables, it has transitional dynamics unlike most of the previous studies on endogenous...