[01] Diana Loubaki, ISG, Department of Economics, Marien NGouabi University, Brazzaville, Congo Republic.

Endogenous growth models particularity is to be non-testable since their fundamental goal is the equilibrium existence and its stability study. In contrast however, theoretical finance aim is to analyze volatility of asset prices in our article, caused by the bubbles existence provided by anticipations on future financial asset prices, thus is unstable by its nature. The idea is to conjugate stability and instability together in order to leave emerge a kind of saddle path where both growth and finance move at the same constant rate. Since the existing heterogeneity among the both fields, doesn’t allow the provision of the reason for which financial crisis transmit in real economy create crashes and booms in the whole economic system. Indeed, using an OLG model where the equivalency between growth and finance based on bubbles and asset prices theories is highlighted and forms the complete theory, the methodology provided makes the theory yields a testability character since the both fields are endogeneized. Then, we find that, “global long-run growth” i.e the sum of asset prices and GNP growth rates is the lacking puzzle of the story because it makes growth stability and instable finance interaction, admits the unique empirical Pareto optimal equilibrium existence, thus the locus where the whole economic dynamics is stable over time.

Global Long-run Growth, Bubbles, Asset Prices, Volatility, Unique Empirical Pareto Optimal Equilibrium, Equilibrium Stability

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