Random Fixed Points in a Stochastic Solow Growth Model

Zurich IEER Working Paper No. 65

15 Pages Posted: 7 Feb 2001

See all articles by Bjorn Schmalfuss

Bjorn Schmalfuss

University of Applied Sciences Merseburg

Klaus Reiner Schenk-Hoppé

University of Manchester - Department of Economics; Norwegian School of Economics (NHH) - Department of Finance

Date Written: November 2000

Abstract

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

Suggested Citation

Schmalfuss, Bjorn and Schenk-Hoppé, Klaus Reiner, Random Fixed Points in a Stochastic Solow Growth Model (November 2000). Zurich IEER Working Paper No. 65, Available at SSRN: https://ssrn.com/abstract=259133 or http://dx.doi.org/10.2139/ssrn.259133

Bjorn Schmalfuss

University of Applied Sciences Merseburg ( email )

Geusaer Strasse 88
Department of Applied Sciences
06217 Merseburg
Germany

Klaus Reiner Schenk-Hoppé (Contact Author)

University of Manchester - Department of Economics ( email )

Arthur Lewis Building
Oxford Road
Manchester, M13 9PL
United Kingdom

Norwegian School of Economics (NHH) - Department of Finance ( email )

Helleveien 30
N-5045 Bergen
Norway

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