Abstract
We discuss an application of optimal control theory to the problems of deriving optimal macroeconomic policies and evaluating past policies under different assumptions about the economic model. Applying an algorithm due to Chow for the optimization of quadratic objective functions subject to nonlinear dynamic models, optimal fiscal policies are derived for two simple macroeconometric models for Austria. Several measures of the “optimality” of policies actually applied during two different election periods (1967-1970, 1971-1975) are calculated and compared. It is shown how the evaluation of past policies depends upon the economic model upon which the optimization experiments are based.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
