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FURTHER INSPECTION OF THE STOCHASTIC GROWTH MODEL BY AN ANALYTICAL APPROACH
Published online by Cambridge University Press: 26 September 2002
Abstract
It has been argued that a clear understanding of the stochastic growth model can best be achieved by working out an approximate analytical solution. This paper follows that idea but streamlines the presentation of the loglinear approximate solution for the neoclassical model of capital accumulation. By focusing on the partial elasticity of capital stock with respect to its lag term, this paper is able to confirm analytically some conclusions based on numerical calculations in previous papers, and to clarify why a simpler solution arises in several special cases.
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- © 2002 Cambridge University Press
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