Endogenous technological change: a note on stability

Lutz Arnold ()

Economic Theory, 2000, vol. 16, issue 1, 219-226

Abstract: 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.

Keywords: R&D; Endogenous growth; Saddle-point stability; Transitional dynamics. (search for similar items in EconPapers)
JEL-codes: O41 (search for similar items in EconPapers)
Date: 2000-04-14
Note: Received: October 6, 1998; revised version: April 19, 1999
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Citations: View citations in EconPapers (27)

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