Economics - Research Publications

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Author: Nishimura, Kazuo × Author: STACHURSKI, JOHN × End date: 2006 × Start date: 2004 × Type: Preprint ×

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    Stochastic growth with nonconvexities: the optimal case
    Nishimura, Kazuo ; Rudnicki, Ryszard ; STACHURSKI, JOHN ( 2004-02)
    This paper studies optimal investment and dynamicbehaviour of stochastically growing economies. We assume neitherconvex technology nor bounded support of the productivity shocks.A number of basic results concerning the investment policy and theRamsey–Euler equation are established. We also prove a fundamentaldichotomy pertaining to optimal growth models perturbedby standard econometric shocks: Either an economy is globallystable or it is globally collapsing to the origin.
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    Stochastic optimal growth when the discount rate vanishes
    Nishimura, Kazuo ; STACHURSKI, JOHN ( 2004-07)
    It has been shown that long-run optimality of thelimit of discounted optima when the discount rate vanishes is impliedby a condition on the value function of the optimal program.We suggest a new method to verify this condition in the contextof one-sector optimal growth. The idea should be more widelyapplicable.