This paper examines the possibility of the existence of bubbles and their e
ffects on the growth rate by using an endogenous growth model. A necessary
and sufficient condition for the existence of steady-state equilibrium with
bubbles is provided. If nonzero rates of the useless asset supply are allo
wed, a steady-state equilibrium with bubbles exists even if the growth rate
of the bubbleless equilibrium is lower than the market interest rate. The
growth rate in the steady state with bubbles depends positively on the supp
ly rate of the useless asset. Dynamic properties of bubbles are also analys
ed.