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Stochastic Growth with Increasing Returns: Stability and Path Dependence

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  • Stachurski John

    (IER, Kyoto University)

Abstract

The paper demonstrates global stability in a class of stochastic overlapping generations economies with increasing returns. These results are applied to the study of path dependent dynamics. In particular, for nonlinear stochastic models it is seen that persistence of the historical state and formal ergodicity may easily coincide. A new definition of path dependence is proposed that incorporates such dynamics.

Suggested Citation

  • Stachurski John, 2003. "Stochastic Growth with Increasing Returns: Stability and Path Dependence," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 7(2), pages 1-13, July.
    • Handle: RePEc:bpj:sndecm:v:7:y:2003:i:2:n:1
    DOI: 10.2202/1558-3708.1104
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    References listed on IDEAS

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    1. Kiminori Matsuyama, 1991. "Increasing Returns, Industrialization, and Indeterminacy of Equilibrium," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 617-650.
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    4. Paul David, 1997. "Path Dependence and the Quest for Historical Economics: One More chorus of Ballad of QWERTY," Oxford Economic and Social History Working Papers _020, University of Oxford, Department of Economics.
    5. Futia, Carl A, 1982. "Invariant Distributions and the Limiting Behavior of Markovian Economic Models," Econometrica, Econometric Society, vol. 50(2), pages 377-408, March.
    6. William A. Brock & Leonard J. Mirman, 2001. "Optimal Economic Growth And Uncertainty: The Discounted Case," Chapters, in: W. D. Dechert (ed.), Growth Theory, Nonlinear Dynamics and Economic Modelling, chapter 1, pages 3-37, Edward Elgar Publishing.
    7. Quah, Danny T., 1996. "Empirics for economic growth and convergence," European Economic Review, Elsevier, vol. 40(6), pages 1353-1375, June.
    8. Quah, Danny T, 1996. "Convergence Empirics across Economies with (Some) Capital Mobility," Journal of Economic Growth, Springer, vol. 1(1), pages 95-124, March.
    9. Paul A. David, 1997. "Path Dependence and the Quest for Historical Economics: One More chorus of Ballad of QWERTY," Oxford University Economic and Social History Series _020, Economics Group, Nuffield College, University of Oxford.
    10. Costas Azariadis & Allan Drazen, 1990. "Threshold Externalities in Economic Development," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 105(2), pages 501-526.
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    Cited by:

    1. Morand, Olivier F. & Reffett, Kevin L., 2007. "Stationary Markovian equilibrium in overlapping generation models with stochastic nonclassical production and Markov shocks," Journal of Mathematical Economics, Elsevier, vol. 43(3-4), pages 501-522, April.
    2. Kevin Reffett & Olivier Morand, 2008. "Isotone recursive methods for Stationary Markov Equilibra in OLG models with stochastic nonclassical production," 2008 Meeting Papers 470, Society for Economic Dynamics.
    3. Shivraj Kanungo & Vikas Jain, 2008. "Modeling email use: a case of email system transition," System Dynamics Review, System Dynamics Society, vol. 24(3), pages 299-319, September.

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