Mitra, Tapan; Roy, Santanu - In: Journal of Economic Theory 147 (2012) 2, pp. 850-880
In a stochastic economy, long run consumption and output may not be bounded away from zero even when productivity is arbitrarily high near zero and uncertainty is arbitrarily small. In the one-sector stochastic optimal growth model with i.i.d. production shocks, we characterize the nature of...