Acta Oeconomica Pragensia 2007, 15(4):88-98 | DOI: 10.18267/j.aop.78

Stochastic Growth Models With No Discounting

Karel Sladký
Ing. Karel Sladký, CSc. - research fellow; Department of Econometrics, Institute of Information Theory and Automation of the Academy of Sciences of the Czech Republic, Pod Vodárenskou věží 4, 182 08 Prague 8, Czech Republic, sladky@utia.cas.cz

In this note, we consider in discrete time the Ramsey growth model without discounting under stochastic uncertainty modelled by Markov processes. To make the model computationally tractable we shall consider finite state approximations of the original model. Properties of policies maximizing mean value of the global utility of consumers over an infinite time horizon, along with algorithmic procedures finding optimal and suboptimal policies, are reported.

Keywords: economic dynamics, stochastic version of the Ramsey growth model, Markov decision processes
JEL classification: C61, E21, E22

Published: August 1, 2007  Show citation

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Sladký, K. (2007). Stochastic Growth Models With No Discounting. Acta Oeconomica Pragensia, 15(4), 88-98. doi: 10.18267/j.aop.78
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