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

Author

Listed:
  • Takashi Kamihigashi

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

  • John Stachurski

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

Abstract

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.

Suggested Citation

  • Takashi Kamihigashi & John Stachurski, 2012. "Existence, Uniqueness and Stability of Stationary Distributions: An Extension of the Hopenhayn-Prescott Theorem," Discussion Paper Series DP2012-27, Research Institute for Economics & Business Administration, Kobe University.
  • Handle: RePEc:kob:dpaper:dp2012-27
    as

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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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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Stability; Simulation; Stationary equilibria;

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques

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