Using compromise programming for macroeconomic policy making in a general equilibrium framework: theory and application to the Spanish economy

Francisco André, Manuel Alejandro Cardenete () and C Romero
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C Romero: Universidad Politécnica de Madrid

Journal of the Operational Research Society, 2008, vol. 59, issue 7, 875-883

Abstract: Abstract This paper aims to show how Compromise Programming, linked with some results connecting this approach with classic utility optimization, can become a useful analytical tool for designing and assessing macroeconomic policies. The functioning of the method is illustrated through an application to the Spanish economy. In this way, starting from a Computable General Equilibrium Model, a frontier of growth–inflation combinations is determined. After that, several Pareto-efficient policies that represent compromises between economic growth and inflation rate are established and interpreted in economic terms.

Keywords: compromise programming; economics; computable general equilibrium model; optimization; multi-objective (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (9)

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DOI: 10.1057/palgrave.jors.2602415

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