Sustainability in the Stochastic Ramsey Model
Economics
2015-11-24 v1 Probability
Abstract
In this paper we provide a self-contained exposition of the problem of sustaining a constant consumption level in a Ramsey model. Our focus is on the case in which the output capital-ratio is random. After a brief review of the known results on the probabilities of sustaining a target consumption from an initial stock, we present some new results on estimating the probabilities by using Chebyshev inequalities. Some numerical calculations for these estimates are also provided.
Cite
@article{arxiv.1511.07419,
title = {Sustainability in the Stochastic Ramsey Model},
author = {Rabi Bhattacharya and Hyeonju Kim and Mukul Majumdar},
journal= {arXiv preprint arXiv:1511.07419},
year = {2015}
}