Arnold, Lutz G. (2000) Endogenous technological change: a note on stability. Economic Theory 16 (1), pp. 219-226.
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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.
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|Institutions:||Business, Economics and Information Systems > Institut für Volkswirtschaftslehre und Ökonometrie > Lehrstuhl für Theoretische Volkswirtschaft (Prof. Dr. Lutz Arnold)|
|Keywords:||R&D, Endogenous growth, Saddle-point stability, Transitional dynamics|
|Subjects:||300 Social sciences > 330 Economics|
|Refereed:||Yes, this version has been refereed|
|Created at the University of Regensburg:||Unknown|
|Deposited On:||24 Jun 2010 05:01|
|Last Modified:||24 Jun 2010 05:01|