Uniqueness and Determinacy of the Romer (1990) Model

Rongsheng Tang, Gaowang Wang and Jin Wang ()
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Jin Wang: Guanghua School of Management, Peking University

Annals of Economics and Finance, 2020, vol. 21, issue 1, 71-83

Abstract: Romer (1990) solves a steady state (or balanced growth path) of his famous model by a smart conjecture and the proof of uniqueness and the saddle-point stability is examined under a simplified version (Arnold, 2000a, 2000b). Our paper provides a proof in the full model with the method of reduction of dimensionality. Moreover, we introduce a set of policy instruments which improve the monopolistic competitive equilibrium allocation up to social optimum.

Keywords: BGP; Reduction of dimensionality; Social optimum (search for similar items in EconPapers)
JEL-codes: C62 E62 O41 (search for similar items in EconPapers)
Date: 2020
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