Discounting long run average growth in stochastic dynamic programs

Jorge Durán

CEPREMAP Working Papers (Couverture Orange) from CEPREMAP

Abstract: Finding solutions to the Bellman equation relies on restrictive boundedness assumptions. The literature on endogenous growth or business cycle models with unbounded random shocks provide with numerous examples of recursive programs in which returns are not bounded along feasible paths. In this paper we develop a method of proof that allows to account for models of this type. In applications our assumptions only imply that long run average (expected) growth is sufficiently discounted, in sharp contrast with classical assumptons either absolutely bounding growth or bounding each period (instead of long run) maximum (instead of average) growth. We discuss our work in relation to the literature and provide several examples.

JEL-codes: C61 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2001
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.cepremap.fr/depot/couv_orange/co0101.pdf (application/pdf)

Related works:
Journal Article: Discounting long run average growth in stochastic dynamic programs (2003)
Working Paper: DISCOUNTING LONG RUN AVERAGE GROWTH IN STOCHASTIC DYNAMIC PROGRAMS (2002)
Working Paper: Discounting Long Run Average Growth in Stochastic Dynamic Programs (2000)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpm:cepmap:0101

Access Statistics for this paper

More papers in CEPREMAP Working Papers (Couverture Orange) from CEPREMAP Contact information at EDIRC.
Bibliographic data for series maintained by Sébastien Villemot ().