What is Micro Foundations of Romer Model?

The micro foundations of Romer model are built to construct an economy of profit maximising agents that endogenizes technological progress. The micro foundations lay down the microeconomics behind the Romer model. The microeconomics behind the Romer model consists of three sectors – the final goods sector, the intermediate goods sector and the research sector. The aim of the microfoundations of Romer model is to shows how these sectors, attempting to maximise their profit interact in the economy and create technological progress.