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Random Fixed Points in a Stochastic Solow Growth Model

  • Klaus Reiner Schenk-Hopp�
  • Bj�rn Schmalfuss

This paper presents a complete analysis of a stochastic version of the Solow growth model in which all parameters are ergodic random variables. Applying random dynamical systems theory, we prove that the dynamics and, in particular, the long-run behavior is uniquely determined by a globally attracting stable random fixed point. We also discuss the relation of our approach to that of ergodic Markov equilibria.

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Paper provided by Institute for Empirical Research in Economics - University of Zurich in its series IEW - Working Papers with number 065.

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Handle: RePEc:zur:iewwpx:065
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