Stability of Stochastic Optimal Growth Models: A New Approach

Kazuo Nishimura and John Stachurski ()
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John Stachurski: Australian National University

Chapter Chapter 12 in Nonlinear Dynamics in Equilibrium Models, 2012, pp 289-307 from Springer

Abstract: Abstract Many economic models are now explicitly dynamic and stochastic. Their state variables evolve in line with the decisions and actions of individual economic agents. These decisions are identified in turn by imposing rationality. Depending on technology, market structure, time discount rates and other primitives, rational behavior may lead either to stability or to instability.

Keywords: Euler Equation; Lyapunov Function; Central Limit Theorem; Optimal Policy; Marginal Utility (search for similar items in EconPapers)
Date: 2012
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Journal Article: Stability of stochastic optimal growth models: a new approach (2005)
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DOI: 10.1007/978-3-642-22397-6_12

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