Posch, Olaf; Wälde, Klaus - Department of Economics, Adam Smith Business School - 2006
and welfare.
Keywords: Endogenous fluctuations and growth, welfare analysis, taxation, sto-
chastic continuous time model … and Nelson (1981). Both the trend component
and the stationary component are stochastic. Even though we are in continuous … time, we
can easily relate our trend component to a discrete time random walk as we can describe
it by the pure random walk …