Stochastic Optimal Growth with Nonconvexities
This paper studies optimal investment and dynamic behavior in stochastically growing economies. We assume neither convex technology nor bounded support of the productivity shocks. A number of basic results concerning the investment policy and the Ramsey-Euler equation are established. We also prove a fundamental dichotomy pertaining to optimal growth models perturbed by standard econometric shocks: either an economy is globally stable or it is globally collapsing to the origin.
|Collections||ANU Research Publications|
|Source:||Journal of Mathematical Economics|
|01_Nishimura_Stochastic_Optimal_Growth_with_2006.pdf||244.6 kB||Adobe PDF||Request a copy|
|02_Nishimura_Stochastic_Optimal_Growth_with_2006.pdf||257.46 kB||Adobe PDF||Request a copy|
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