Open AccessStochastic stability in monotone economies
Author(s) -
Kamihigashi Takashi,
Stachurski John
Publication year - 2014
Publication title -
theoretical economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 4.404
H-Index - 32
eISSN - 1555-7561
pISSN - 1933-6837
DOI - 10.3982/te1367
Subject(s) - monotone polygon , mathematical economics , stability (learning theory) , economics , mathematics , computer science , geometry , machine learning
This paper extends a family of well known stability theorems for monotone economies to a significantly larger class of models. We provide a set of general conditions for existence, uniqueness, and stability of stationary distributions when monotonicity holds. The conditions in our main result are both necessary and sufficient for global stability of monotone economies that satisfy a weak mixing condition introduced in the paper. Through our analysis, we develop new insights into the nature and causes of stability and instability.