Approximations to viability kernels for sustainable macroeconomic policies

Jacek B Krawczyk, Alastair Pharo and Mark Simpson

No 18551, Working Paper Series from Victoria University of Wellington, School of Economics and Finance

Abstract: Maintaining an open economy within certain bounds on inflation, output gap and exchange rate can help sustainable economic development. Macroeconomics proposes monetary-policy models that describe evolution of the above quantities. We use one such model, constituted by a four-metastate one-control system, to compute viability kernel approximations that one can use to assist the central bank to establish "sustainable" policies. We propose a simple heuristic algorithm that leads to kernel approximations for this and similar models.

Keywords: monetary policy; viability kernel; algorithm; MATLAB (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:vuw:vuwecf:18551

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