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Stochastic Stability in Monotone Economies

  • Takashi Kamihigashi

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

  • John Stachurski

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

This paper extends a family of well-known stability theorems for monotone economies to a significantly larger class of models. We provide a set of general conditions for existence, uniqueness and stability of stationary distributions when monotonicity holds. 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 into 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/DP2013-02.pdf
File Function: First version, 2013
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Paper provided by Research Institute for Economics & Business Administration, Kobe University in its series Discussion Paper Series with number DP2013-02.

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Length: 31 pages
Date of creation: Jan 2013
Date of revision:
Handle: RePEc:kob:dpaper:dp2013-02
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