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Stochastic Optimal Growth with Unbounded Shock

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  • Stachurski, J.

Abstract

This paper considers a neoclassical optimal growth problem where the shock that perturbs the economy in each time period is potentially unbounded on the state space. Sufficient conditions for existence, uniqueness and stability of equilibria are derived in terms of the primitives of the model using new techniques from the field of perturbed dynamical systems.

Suggested Citation

  • Stachurski, J., 2001. "Stochastic Optimal Growth with Unbounded Shock," Department of Economics - Working Papers Series 777, The University of Melbourne.
  • Handle: RePEc:mlb:wpaper:777
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    File URL: http://www.economics.unimelb.edu.au/downloads/wpapers-00-01/777.pdf
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    References listed on IDEAS

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    1. Duffie, Darrell, et al, 1994. "Stationary Markov Equilibria," Econometrica, Econometric Society, vol. 62(4), pages 745-781, July.
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    8. Futia, Carl A, 1982. "Invariant Distributions and the Limiting Behavior of Markovian Economic Models," Econometrica, Econometric Society, vol. 50(2), pages 377-408, March.
    9. Brock, W. A. & Majumdar, M., 1978. "Global asymptotic stability results for multisector models of optimal growth under uncertainty when future utilities are discounted," Journal of Economic Theory, Elsevier, vol. 18(2), pages 225-243, August.
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    19. repec:rus:cemicf:358 is not listed on IDEAS
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    More about this item

    Keywords

    ECONOMIC GROWTH ; ECONOMIC MODELS;

    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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