Capital accumulation in a model of growth and creative destruction
Abstract: Capital accumulation and creative destruction is modeled together with risk-averse households. The novel aspect-risk-averse households-allows to use well-known models not only for analyzing long-run growth as in the literature but also short-run fluctuations. The model remains analytically tractable due to a very convenient property of the household's investment decision in this stochastic continuous-time setup.
File(s): File format is application/pdf http://minneapolisfed.org/research/common/pub_detail.cfm?pb_autonum_id=866
Provider: Federal Reserve Bank of Minneapolis
Part of Series: Discussion Paper / Institute for Empirical Macroeconomics
Publication Date: 2001