Random Fixed Points in a Stochastic Solow Growth Model
Zurich IEER Working Paper No. 65
15 Pages Posted: 7 Feb 2001
Date Written: November 2000
This paper presents a complete analysis of a stochastic version of the Solow growth model in which all parameters are ergodic random variables. Applying random dynamical systems theory, we prove that the dynamics and, in particular, the long-run behavior is uniquely determined by a globally attracting stable random fixed point. We also discuss the relation of our approach to that of ergodic Markov equilibria.
Keywords: Solow Growth Model; Random Dynamical Systems; Random Fixed Points; Ergodic Markov Equilibria
JEL Classification: C62, E13, O41
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