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Stochastic Properties of Fast vs. Slow Growing Economies
Jean-Pierre Danthine
John B. Donaldson
Abstract
This paper is concerned with characterizing the probability distributions that describe the (stochastic) stationary state of a neoclassical model of optimal growth. In particular, using both theoretical analysis and numerical simulation, we search for systematic relationships between savings (and investment) rates and variability of the economy's aggregates.
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