Econometrica: Jul 1981, Volume 49, Issue 4

Stochastic Properties of Fast vs. Slow Growing Economies<1007:SPOFVS>2.0.CO;2-4
p. 1007-1033

Jean-Pierre Danthine, John B. Donaldson

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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