Long-run invariance in economic dynamics: A note

A common thread in relatively disparate areas of economic dynamics is aninvariance result demonstrating the convergence in a suitable metric of the time paths (or the invariance of the steady state) of a given variable to alternative specifications of some parameter. This note offers a unified approach to this phenomenon in the context of a general nonstationary growth model. The technique developed exploits the stochastic specification through a passage to martingale techniques and is general enough to incorporate nonclassical technologies. Since the paper nests the invariance result from diverse areas as special cases, in one stroke it extends the received analysis which has usually been conducted in a deterministic stationary environment to a stochastic framework in which nonstationarities enter into the description of preferences, technology, and the stochastic environment.