Improvement on the congested government productive spending in stochastic endogenous growth model

Based on Benhabib and Farmer´s Indeterminacy model, improvement on indeterminacy stochastic endogenous growth model of the congested government productive spending is presented. Then the two-dimensional system based on dynamic optimization dynamic optimization is constructed and the stability of the system is analyzed. Finally, the theatrical proof is given to illustrate that overinvestment from government would cause the Indeterminacy of economic system.