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Random Fixed Points in a Stochastic Solow Growth Model

  • Klaus Reiner Schenk-Hoppé
  • Björn 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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  8. Fehr, Ernst & Schmidt, Klaus M., . "A theory of fairness, competition, and cooperation," Chapters in Economics, University of Munich, Department of Economics.
  9. Ernst Fehr & Jean-Robert Tyran, 2000. "Does Money Illusion Matter?," IEW - Working Papers 045, Institute for Empirical Research in Economics - University of Zurich.
  10. Zweimüller, Josef & Winter-Ebmer, Rudolf, 2000. "Firm-specific Training: Consequences for Job Mobility," IZA Discussion Papers 138, Institute for the Study of Labor (IZA).
  11. Ambler, Steve & Paquet, Alain, 1994. "Stochastic Depreciation and the Business Cycle," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 35(1), pages 101-16, February.
  12. Mirman, Leonard J., 1973. "The steady state behavior of a class of one sector growth models with uncertain technology," Journal of Economic Theory, Elsevier, vol. 6(3), pages 219-242, June.
  13. Futia, Carl A, 1982. "Invariant Distributions and the Limiting Behavior of Markovian Economic Models," Econometrica, Econometric Society, vol. 50(2), pages 377-408, March.
  14. Armin Falk & Ernst Fehr & Urs Fischbacher, 2001. "Appropriating the Commons A Theoretical Explanation," CESifo Working Paper Series 474, CESifo Group Munich.
  15. Bruno S. Frey & Reiner Eichenberger, . "A Proposal for a Flexible Europe," IEW - Working Papers 056, Institute for Empirical Research in Economics - University of Zurich.
  16. Leonard J. Mirman & Klaus Reiner Schenk-Hoppé, . "Financial Markets and Stochastic Growth," IEW - Working Papers 066, Institute for Empirical Research in Economics - University of Zurich.
  17. Bruno S. Frey & Alois Stutzer, . "Maximising Happiness?," IEW - Working Papers 022, Institute for Empirical Research in Economics - University of Zurich.
  18. Bruno S. Frey & Lorenz Goette, . "Does Pay Motivate Volunteers?," IEW - Working Papers 007, Institute for Empirical Research in Economics - University of Zurich.
  19. Mirman, Leonard J, 1972. "On the Existence of Steady State Measures for One Sector Growth Models with Uncertain Technology," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 13(2), pages 271-86, June.
  20. Armin Falk & Ernst Fehr & Urs Fischbacher, . "Testing Theories of Fairness - Intentions Matter," IEW - Working Papers 063, Institute for Empirical Research in Economics - University of Zurich.
  21. Bruno S. Frey & Reto Jegen, 2000. "Motivation Crowding Theory: A Survey of Empirical Evidence," CESifo Working Paper Series 245, CESifo Group Munich.
  22. Lalive, R. & van Ours, J.C. & Zweimüller, J., 2000. "The Impact of Active Labor Market Programs and Benefit Entitlement Rules on the Duration of Unemployment," Discussion Paper 2000-41, Tilburg University, Center for Economic Research.
  23. T. W. Swan, 1956. "ECONOMIC GROWTH and CAPITAL ACCUMULATION," The Economic Record, The Economic Society of Australia, vol. 32(2), pages 334-361, November.
  24. Bruno S. Frey & Marcel Kucher & Alois Stutzer, 1999. "Outcome, Process & Power in Direct Democracy," CESifo Working Paper Series 222, CESifo Group Munich.
  25. Simon Gächter & Armin Falk, . "Work motivation, institutions, and performance," IEW - Working Papers 062, Institute for Empirical Research in Economics - University of Zurich.
  26. Armin Falk & Ernst Fehr & Urs Fischbacher, . "On the Nature of Fair Behavior," IEW - Working Papers 017, Institute for Empirical Research in Economics - University of Zurich.
  27. Carl Futia, 2010. "Invariant Distributions and the Limiting Behavior of Markovian Economic Models," Levine's Working Paper Archive 497, David K. Levine.
  28. Binder, Michael & Pesaran, M Hashem, 1999. " Stochastic Growth Models and Their Econometric Implications," Journal of Economic Growth, Springer, vol. 4(2), pages 139-83, June.
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  30. Iris Bohnet & Bruno S. Frey & Steffen Huck, . "More Order with Less Law: On Contract Enforcement, Trust, and Crowding," IEW - Working Papers 052, Institute for Empirical Research in Economics - University of Zurich.
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