Almost sure convergence to zero in stochastic growth models

Takashi Kamihigashi

No 170, Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University

Abstract: This paper considers the resource constraint commonly used in stochastic one-sector growth models. Shocks are not required to be i.i.d. It is shown that any feasible path converges to zero exponentially fast almost surely under a certain condition. In the case of multiplicative shocks, the condition means that the shocks are sufficiently volatile. Convergence is faster the larger their volatility is, and the smaller the maximum average product of capital is.

Keywords: Stochastic growth; Inada condition; Convergence to zero; Extinction (search for similar items in EconPapers)
JEL-codes: C61 C62 E30 O41 (search for similar items in EconPapers)
Pages: 10 pages
Date: 2003-09, Revised 2005-05
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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https://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/dp170.pdf Revised version, 2005 (application/pdf)

Related works:
Journal Article: Almost sure convergence to zero in stochastic growth models (2006)
Working Paper: Almost Sure Convergence to Zero in Stochastic Growth Models (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:kob:dpaper:170

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