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Existence, Uniqueness and Stability of Stationary Distributions: An Extension of the Hopenhayn-Prescott Theorem

  • Takashi Kamihigashi

    (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan)

  • John Stachurski

    (Research School of Economics, Australian National University, Australia)

This paper strengthens the Hopenhayn-Prescott stability theorem for monotone economies by extending it to a significantly larger class of models. We provid general conditions for existence, uniqueness and stability of stationary distributions. The conditions in our main result are both necessary and sufficient for global stability of monotone economies that satisfy a weak mixing condition introduced in the paper. Through our analysis we develop new insights on the nature and causes of stability and instability.

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File URL: http://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2012-27.pdf
File Function: First version, 2012
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Paper provided by Research Institute for Economics & Business Administration, Kobe University in its series Discussion Paper Series with number DP2012-27.

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Length: 29 pages
Date of creation: Oct 2012
Date of revision:
Handle: RePEc:kob:dpaper:dp2012-27
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