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Ergodic Chaos in Optimal Growth Models with Low Discount Rates.

We show that for every discount factor rho epsilon(O,1) one can find infinitely many strictly concave discrete-time optimal growth models in reduced form which have optimal policy functions exhibiting ergodic chaos. These reduced form models are interpreted in a two-sector optimal growth setting with utility functions depending on consumption as well as on capital.
Year of publication:
1994
Authors: Nishimura, Kazuo ; Sorger, Gerhard ; Yano, Makoto
Published in:
Economic Theory. - Springer. - Vol. 4.1994, 5, p. 705-17
Publisher: Springer
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Type of publication: Article
Source:
Persistent link: https://www.econbiz.de/10005753345
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