A Nonlinear Control Model of Growth, Risk and Structural Change

DOI: 10.4236/iim.2010.22010   PDF   HTML     4,494 Downloads   7,465 Views  


Uncertainty is perceived as the means of removing the obstacles to growth through the activation of Knig- htian entrepreneurship. A dynamic stochastic model of continuous-time growth is proposed and empirically tested, including equilibrating and creative entrepreneurial activity. We find that uncertainty affects economic growth and the rate of return, and causes structural changes in portfolio shares for the two types of entrepreneurial events. Structural change depends mainly on the intertemporal rate of substitution, productiv-ity ratios, and finally intersectoral difference in return and risk.

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P. Petrakis and S. Kotsios, "A Nonlinear Control Model of Growth, Risk and Structural Change," Intelligent Information Management, Vol. 2 No. 2, 2010, pp. 80-89. doi: 10.4236/iim.2010.22010.

Conflicts of Interest

The authors declare no conflicts of interest.


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