Stochastic Processes. A Critical Synthesis
Jorge Ludlow Wiechers*
Felicity Williams*
Beatríz Mota Aragón**
Felipe Peredo y Rodríguez**

Abstract
The subject of Stochastic Processes is highly specialized and here only we present an assessment of the subject. To explain uncertainty dynamics a model is required which consists of a system et stochastic differential equation. We provide a critical synthesis of the literature and analyze the geometric behavior of a basket of useful models, stopping at computer simulation and borrowing ideas taken from the Monte Carlo method.

Key words: Wiener processes, diffusion processes, Ito formule, Ornstein-Uhlenbeck, Merton, Vasicek, Cox Ingersoll and Ross, Ho-Lee, Longstaff, Hull-White.
JEL Classification: C15, C32, G11, G14.

* Profesores-Investigadores del Departamento de Economía de la UAM-A (jlw@correo.azc.uam.mx) (mfb@correo.azc.uam.mx).
** Profesores-Investigadores del Departamento de Economía de la UAM-I (bmo@xanum.uam.mx) (fpr@xanum.uam.mx).

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