Stochastic Growth Of World Economy

This article set up stochastic growth model of world economy with the method of stochastic optimization. Under the assumption that whether the capital market is complete, the paper set up two stochastic equilibrium models. One is stochastic growth model of complete world economy; the other is stochastic growth model of incomplete world economy. In complete world economy, the thesis obtains results as follows. Firstly, if the consumers in two economies have identical degrees of risk aversion, a perfectly pooled capital portfolio shares in two economies will be obtained; Secondly, the economic growth of home country will be enhanced with the entry of the foreign productive risk and will be slowed down under the circumstance that the foreign productive shocks are no risk; Thirdly, the home capital portfolio will flow from the home country to the foreign country with the increase of the home productive shocks;Lastly, the papers analysis the relation of the home productive risks and the consumption-wealth ratio with the difference of parameters. In incomplete world economy, Stochastic equilibrium is established and obtained macroeconomic Equilibrium Solutions, some conclusions are drawn. Firstly, the papers obtain the necessary conditions about the economic scale; Secondly, when the representative consumers have higher degree of risk aversion, the production shocks will accelerate the growth, when the representative consumers have lower degree of risk ,the productive shocks have negative relativity with the expected economic growth ratio; Thirdly, when the consumers have higher degree of risk aversion, the consumption-wealth ratio have negative relativity with the productive shocks and the government expenditure shocks, when the consumers have lower degree of risk aversion, the opposition conclusions are obtained; Fourthly, when the consumers have higher degree of risk aversion, the productive shocks and the government expenditure shocks have positive relativity with the ratio of capital and wealth and have negative relativity with the ratio of world bond and wealth; Lastly, the papers obtain that the increase of the ratio of capital and wealth and the productive shocks will slow down welfare, and the expression of the world economic growth rate is the linear combination of the growth rates of the two countries.