Stochastic Growth with the Social-Status Concern: The Existence of a Unique Stable Distribution

Liutang Gong, Zhao Xiaojun () and Heng-Fu Zou ()

No 408, CEMA Working Papers from China Economics and Management Academy, Central University of Finance and Economics

Abstract: This paper extends Kurz¡¯s (1968) growth model to a stochastic growth framework with the social-status concern and production shocks. Using the stochastic monotonicity of stochastic dynamic system and methods using in Zhang (2007), the existence and stability of invariant distribution has been investigated. Different from the existence of multiple steady states under certainty, it is shown that there exists a unique stable invariant distribution under uncertainty.

Keywords: Stochastic growth; the Spirit of capitalism; Stochastic dominance; Multiple equilibria (search for similar items in EconPapers)
JEL-codes: C61 C62 O41 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Journal Article: Stochastic growth with social-status concern: The existence of a unique stable distribution (2010)
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