Sustainability in the Stochastic Ramsey Model

Rabi Bhattacharya, Hyeonju Kim, Mukul Majumdar

Research output: Contribution to journalArticlepeer-review

1 Scopus citations

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.

Original languageEnglish (US)
Pages (from-to)169-184
Number of pages16
JournalJournal of Quantitative Economics
Volume13
Issue number2
DOIs
StatePublished - Dec 2015

Keywords

  • Chebysev inquality
  • Ramsey model
  • Ruin probability
  • Sustainability

ASJC Scopus subject areas

  • Economics and Econometrics
  • Economics, Econometrics and Finance (miscellaneous)
  • Development
  • Business and International Management

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