Optimization in Continuous Time and Policy Design in the Italian Economy

Giancarlo Gandolfo and Maria Luisa Petit

Annals of Economics and Statistics, 1987, issue 6-7, 311-333

Abstract: After an introduction to the advantages of continuous time macroeconometric models, the authors briefly illustrate a macroeconometric model of the Italian economy specified as a system of 23 stochastic differential equations and show the application of optimal control techniques (based on Pontryagin's maximum principle) to this model. They illustrate the results obtained and examine their economic implications, amongst which the possibility of obtaining a better macroeconomic performance by means of a different policy mix.

Date: 1987
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Persistent link: https://EconPapers.repec.org/RePEc:adr:anecst:y:1987:i:6-7:p:311-333

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