A Nonlinear Control Model of Growth, Risk and Structural Change
P. E. Petrakis, S. Kotsios
DOI: 10.4236/iim.2010.22010   PDF    HTML     4,884 Downloads   8,125 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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Petrakis, P. and Kotsios, S. (2010) A Nonlinear Control Model of Growth, Risk and Structural Change. Intelligent Information Management, 2, 80-89. doi: 10.4236/iim.2010.22010.

Conflicts of Interest

The authors declare no conflicts of interest.


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