Hostname: page-component-7b7567c8c-7pwfn Total loading time: 0 Render date: 2026-11-13T22:07:24.123Z Has data issue: false hasContentIssue false
  • English
  • Français

COMPARATIVE STATICS AND DYNAMICS OF THE ROMER R&D GROWTH MODEL WITH QUALITY UPGRADING

Published online by Cambridge University Press:  01 November 2008

Lutz G. Arnold and
Wolfgang Kornprobst
Lutz G. Arnold*
Affiliation:
University of Regensburg
Wolfgang Kornprobst
Affiliation:
University of Regensburg
*
Address correspondence to: Lutz G. Arnold, Economic Theory, Department of Economics, University of Regensburg, 93040 Regensburg, Germany; e-mail: lutz.arnold@wiwi.uni-r.de.
Rights & Permissions [Opens in a new window]

Abstract

Core share and HTML view are not available for this content. However, as you have access to this content, a full PDF is available via the 'Save PDF' action button.

This paper replaces increasing product variety with quality upgrading in the Romer model [Romer, Paul M., Journal of Political Economy 98 (1990), S71–S102]. We show that the range of parameters for which a steady state exists can be divided into two subspaces with well-behaved comparative statics and saddle-point dynamics in one subspace, but with “perverse” comparative-statics properties and either equilibrium indeterminacy or instability in the other subspace. These results for the closed economy can also be used to characterize the dynamics of the M-country open-economy version of the model.

Keywords

Endogenous GrowthTransitional DynamicsIndeterminacy

Information

Type
Notes
Information
Macroeconomic Dynamics , Volume 12 , Issue 5 , November 2008, pp. 702 - 716
Copyright
Copyright © Cambridge University Press 2008

References

REFERENCES

Aghion, Philippe and Howitt, Peter (1992) A model of growth through creative destruction. Econometrica 60, 323–351.CrossRefGoogle Scholar
Aghion, Philippe and Howitt, Peter (2006) Joseph Schumpeter Lecture. Appropriate growth policy: A unifying framework. Journal of the European Economic Association 4, 269–314.CrossRefGoogle Scholar
Arnold, Lutz G. (2000a) Endogenous technological change: A note on stability. Economic Theory 16, 219–226.CrossRefGoogle Scholar
Arnold, Lutz G. (2000b) Stability of the market equilibrium in Romer's model of endogenous technological change: A complete characterization. Journal of Macroeconomics 22, 69–84.CrossRefGoogle Scholar
Arnold, Lutz G. (2006) The dynamics of the Jones R&D growth model. Review of Economic Dynamics 9, 143–152.CrossRefGoogle Scholar
Arnold, Lutz G. (2007) A generalized multi-country endogenous growth model. International Economics and Economic Policy 4, 61–100.Google Scholar
Asada, Toichiro, Semmler, Willi, and Novak, Andreas J. (1998) Endogenous growth and the balanced growth equilibrium. Ricerche Economiche 52, 189–212.Google Scholar
Barro, Robert J. and Sala-i-Martin, Xavier (2004) Economic Growth, second edition. Cambridge, MA: MIT Press.Google Scholar
Benhabib, Jess, Perli, Roberto, and Xie, Danyang (1994), Monopolistic competition, indeterminacy and growth. Ricerche Economiche 48, 279–298.CrossRefGoogle Scholar
Devereux, Michael B. and Lapham, Beverly J. (1994) The stability of economic integration and endogenous growth. Quarterly Journal of Economics 109, 299–308.CrossRefGoogle Scholar
Garcia-Castrillo, Pedro and Sanso, Marcos (2002) Transitional dynamics and thresholds in Romer's endogenous technological change model. Macroeconomic Dynamics 6, 442–456.CrossRefGoogle Scholar
Grossman, Gene M. and Helpman, Elhanan (1991a) Innovation and Growth in the Global Economy. Cambridge, MA: MIT Press.Google Scholar
Grossman, Gene M. and Helpman, Elhanan (1991b) Quality ladders in the theory of growth. Review of Economic Studies 58, 43–61.CrossRefGoogle Scholar
Jones, Charles I. (1995) R&D-based models of economic growth. Journal of Political Economy 103, 759–784.CrossRefGoogle Scholar
Rivera-Batiz, Luis A. and Romer, Paul M. (1991) Economic integration and endogenous growth. Quarterly Journal of Economics 106, 531–555.CrossRefGoogle Scholar
Romer, Paul M. (1990) Endogenous technological change. Journal of Political Economy 98, S71–S102.CrossRefGoogle Scholar
Slobodyan, Sergey (2007) Indeterminacy and stability in a modified Romer model. Journal of Macro-economics 29, 169–177.CrossRefGoogle Scholar