Indeterminacy and stability in a modified Romer model

Abstrakt

This paper studies the dynamical properties of an extension of the well-known Romer model of endogenous growth. This model differs from the Romer model by introducing complementarity of intermediate capital goods.

We show that Hopf bifurcation to the absolutely stable steady state is impossible and that the steady state is determinate if the model parameter values belong to a certain set.