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Endogenous technological change: a note on stability

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  • Lutz G. Arnold

    ()
    (Department of Economics, University of Dortmund, Vogelpothsweg 87, D-44227 Dortmund, GERMANY)

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.

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Bibliographic Info

Article provided by Springer in its journal Economic Theory.

Volume (Year): 16 (2000)
Issue (Month): 1 ()
Pages: 219-226

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Handle: RePEc:spr:joecth:v:16:y:2000:i:1:p:219-226

Note: Received: October 6, 1998; revised version: April 19, 1999
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Related research

Keywords: R&D; Endogenous growth; Saddle-point stability; Transitional dynamics.;

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Citations

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Cited by:
  1. Slobodyan, Sergey, 2007. "Indeterminacy and stability in a modified Romer model," Journal of Macroeconomics, Elsevier, vol. 29(1), pages 169-177, March.
  2. Tiago Neves Sequeira & Alexandra Ferreira Lopes & Orlando Gomes, 2012. "A Growth Model with Qualities, Varieties, and Human Capital: Stability and Transitional Dynamics," CEFAGE-UE Working Papers 2012_04, University of Evora, CEFAGE-UE (Portugal).
  3. Lutz G. Arnold, 2006. "The Dynamics of the Jones R&D Growth Model," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 9(1), pages 143-152, January.
  4. Farhad Nili, 2002. "U-shaped Paths of Consumption and Physical Capital in Lucas-type Growth Models," Development and Comp Systems 0211002, EconWPA.
  5. Bettina Büttner, 2006. "Effectiveness versus Efficiency: Growth-Accelerating Policies in a Model of Growth without Scale Effects," German Economic Review, Verein für Socialpolitik, vol. 7, pages 297-316, 08.
  6. Arnold, Lutz G., 2002. "On the growth effects of North-South trade: the role of labor market flexibility," Journal of International Economics, Elsevier, vol. 58(2), pages 451-466, December.
  7. Arnold, Lutz G., 2003. "Growth in stages," Structural Change and Economic Dynamics, Elsevier, vol. 14(1), pages 55-74, March.
  8. Farhad Nili, . "Dynamics of Output Growth, Consumption and Physical Capital in Two-Sector Models of Endogenous Growth," Discussion Papers 00/62, Department of Economics, University of York.
  9. Tatsuro Iwaisako & Koichi Futagami, 2013. "Patent protection, capital accumulation, and economic growth," Economic Theory, Springer, vol. 52(2), pages 631-668, March.
  10. Grossmann, Volker & Steger, Thomas M. & Trimborn, Timo, 2011. "Dynamically optimal R&D subsidization," Working Papers 97, University of Leipzig, Faculty of Economics and Management Science.
  11. Rouhollah Shahnazi & Mohsen Renani & Rahim Dalali Esfahani & Rahman Khoshakhlagh & Mohamad Vaez, 2011. "Optimal Fiscal Policy with Oil Revenues," Iranian Economic Review, Economics faculty of Tehran university, vol. 16(2), pages 73-88, spring.
  12. Been-Lon Chen & Angus Chu, 2010. "On R&D spillovers, multiple equilibria and indeterminacy," Journal of Economics, Springer, vol. 100(3), pages 247-263, July.
  13. Sequeira, Tiago Neves, 2008. "R&D Spillovers in an Endogenous Growth Model with Physical Capital, Human Capital and Varieties," FEUNL Working Paper Series wp532, Universidade Nova de Lisboa, Faculdade de Economia.
  14. Mondal, Debasis, 2008. "Stability analysis of the Grossman-Helpman model of endogenous product cycles," Journal of Macroeconomics, Elsevier, vol. 30(3), pages 1302-1322, September.
  15. Arnold, Lutz G. & Kornprobst, Wolfgang, 2006. "The Dynamics of the Romer R&D Growth Model with Quality Upgrading," University of Regensburg Working Papers in Business, Economics and Management Information Systems 413, University of Regensburg, Department of Economics.
  16. Sergey Slobodyan, 2006. "Indeterminacy and Stability in a Modified Romer Model: A General Case," CERGE-EI Working Papers wp284, The Center for Economic Research and Graduate Education - Economic Institute, Prague.

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