Sustainability in the Stochastic Ramsey Model

Rabi Bhattacharya, Hyeonju Kim and Mukul Majumdar

Papers from arXiv.org

Abstract: In this paper we provide a self-contained exposition of the problem of sustaining a constant consumption level in a Ramsey model. Our focus is on the case in which the output capital-ratio is random. After a brief review of the known results on the probabilities of sustaining a target consumption from an initial stock, we present some new results on estimating the probabilities by using Chebyshev inequalities. Some numerical calculations for these estimates are also provided.

Date: 2015-11
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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:1511.07419

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