This paper introduces a new algorithm, the recursive upwind Gauss-Seidel method, and applies it to solve a standard stochastic growth model in which the technology shocks exhibit heteroskedasticity. This method exploits the fact that the equations defining equilibrium can be viewed as a set of...

Within the context of a stochastic growth economy, the shocks to technology are modeled as a four-state Markov process. The parameters of this process are chosen so that the implied conditional distributions for the marginal product of capital can be ordered in terms of first- and second-order...

This paper compares the risk premia on stock (both conditional and unconditional) implied by a class of overlapping generations and re presentative agent models in an exchange economy with stochastic endo wment growth rates. It is shown that, when shocks are independently d istributed, the...