Picture of wind turbine against blue sky

Open Access research with a real impact...

The Strathprints institutional repository is a digital archive of University of Strathclyde research outputs.

The Energy Systems Research Unit (ESRU) within Strathclyde's Department of Mechanical and Aerospace Engineering is producing Open Access research that can help society deploy and optimise renewable energy systems, such as wind turbine technology.

Explore wind turbine research in Strathprints

Explore all of Strathclyde's Open Access research content

Uncertainty and economic growth in a stochastic R&D model

Wu, F. and Mao, X. and Yin, J. (2008) Uncertainty and economic growth in a stochastic R&D model. Economic Modelling, 25 (6). pp. 1306-1317. ISSN 0264-9993

[img]
Preview
PDF (168_EcoMod_Mao.pdf)
168_EcoMod_Mao.pdf

Download (183kB) | Preview

Abstract

The paper examines an R&D model with uncertainty from the population growth, which is a stochastic cooperative Lotka-Volterra system, and obtains a suciently condition for the existence of the globally positive solution. The long-run growth rate of the economic system is ultimately bounded in mean and fluctuation of its growth will not be faster than the polynomial growth. When uncertainty of the population growth, in comparison with its expectation, is suciently large, the growth rate of the technological progress and the capital accumulation will converge to zero. Inversely, when uncertainty of the population growth is suciently small or its expected growth rate is suciently high, the economic growth rate will not decay faster than the polyno- mial speed. The paper explicitly computes the sample average of the growth rates of both the technology and the capital accumulation in time and compares them with their counterparts in the corresponding deterministic model.