Stochastic Growth with the Social-Status Concern: The Existence of a Unique Stable Distribution

This paper extends Kurz¡¯s (1968) growth model to a stochastic growth framework with the social-status concern and production shocks. Using the stochastic monotonicity of stochastic dynamic system and methods using in Zhang (2007), the existence and stability of invariant distribution has been investigated. Different from the existence of multiple steady states under certainty, it is shown that there exists a unique stable invariant distribution under uncertainty.Stochastic growth, the Spirit of capitalism, Stochastic dominance, Multiple equilibria