A planner and agent in a permanent-income economy cannot observe part of the state, regard their model as an approximation, and value decision rules that are robust across a set of models. They use robust decision theory to choose allocations. Equilibrium prices reflect the preference for...

This paper studies the stability of a stochastic optimal growth economy introduced by Brock and Mirman [Brock,W.A., Mirman, L., 1972. Optimal economic growth and uncertainty: the discounted case. Journal of Economic Theory 4, 479–513] by utilizing stochastic monotonicity in a dynamic system....