Towards endogenous recombinant growth

We study Weitzman's recombinant growth framework with optimally chosen R&D, consumption and saving. The analysis is carried out in the knowledge-capital state space by means of two characteristic curves: one is identified as a turnpike along which growing economies evolve; the other attracts stagnating economies. Sustained growth depends on a condition relating the slopes of the characteristic curves as well as on a minimal endowment requirement. A growing economy reaches the turnpike and evolves along it thereafter. In the long run the shares of income devoted to R&D, saving and consumption approach constant values that depend on the asymptotic characteristic slopes.