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Stochastic Evolution Equations in Banach Spaces and Applications to Heath-Jarrow-Morton-Musiela Equation. (arXiv:1608.05814v1 [q-fin.MF])

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In this paper we study the stochastic evolution equation (1.1) in martingale-type 2 Banach spaces (with the linear part of the drift being only a generator of a C0-semigroup). We prove the existence and the uniqueness of solutions to this equation. We apply the abstract results to the Heath-Jarrow-Morton-Musiela (HJMM) equation (6.3). In particular, we prove the existence and the uniqueness of solutions to the latter equation in the weighted Lebesgue and Sobolev spaces respectively. We also find a sufficient condition for the existence and the uniqueness of an invariant measure for the Markov semigroup associated to equation (6.3) in the weighted Lebesgue spaces.


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