Question: Suppose productivity evolves over time according to a two-states Markov chain with values A_t = 1 - d and A_h = 1 + d where
Suppose productivity evolves over time according to a two-states Markov chain with values A_t = 1 - d and A_h = 1 + d where d > 0 is a real number and with with 2 by 2 transition matrix: P = \begin{bmatrix} p & 1-p \\ 1-p & p \end{matrix} where p \in (0,1) is a real number. Compute the stationary distribution of the stochastic process for productivity
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