Stability of Stationary Distributions in Monotone Economies

This paper generalizes the sufficient conditions for stability of monotone economies and time series models due to Hopenhayn and Prescott (Econometrica, 60, p. 1387–1406, 1992). We introduce a new order-theoretic mixing condition and characterize stability for monotone economies satisfying this condition. We also provide a range of results that can be used to verify our mixing condition in applications, as well as the other components of our main stability theorem. Through this approach, we extend Hopenhayn and Prescott’s method to a significantly larger class of problems, and develop new perspectives on the causes of instability and stability.