Abstract
The purpose of this paper is to analyze how optimal control results respond to variations in the objective function and the policy maker’s time horizon. On the basis of a macroeconometric model for Hungary we attempt to address the question of whether a smoother growth path or a lower level of foreign debt could have been achieved. The results show that the taxes and subsidies linked to foreign trade variables — as instruments of the optimal control problem — are effective in the short run, but in the long run they do not decrease considerably the level of foreign debt.
This is a preview of subscription content, log in via an institution.
Buying options
Tax calculation will be finalised at checkout
Purchases are for personal use only
Learn about institutional subscriptionsPreview
Unable to display preview. Download preview PDF.
References
Brada, J.C., A.E. King and D.E. Schlagenhauf (1981), ‘The Optimality of Socialist Development Strategies: An Empirical Inquiry’, Journal of Economic Dynamics and Control, Vol. 2., pp. 1–27.
Chow, G.C. (1975) Analysis and Control of Dynamic Economic Systems, Wiley.
Drud, A. (1978) ‘An Optimization Code for Nonlinear Econometric Models Based on Sparse Matrix Techniques and Reduced Gradients’, Annals of Economic and Social Measurements, Vol. 6., pp. 563–580.
Drud, A. and A. Meeraus (1979), ‘CONOPT — A System for Large Scale Dynamic Nonlinear Optimization — User’s Manual’, Development Research Center, World Bank, Washington, D.C.
Frommholz, H. and J. Wolters (1983), ‘A Controltheoretic Analysis for a Small Econometric Model of the Federal Republic of Germany’, in J. Gruber, ed., Econometric Decision Models, Springer.
Halpern, L. (1989) ‘Foreign Trade in Macroeconomic Context in an Econometric Model’ Institute of Economics, Budapest, Hungary (in Hungarian).
Neck, R. and U. Posch (1982), ‘On the ‘Optimality’ of Macroeconomic Policies: An Application to Austria’, in G. Feichtinger ed., Optimal Control Theory and Economic Analysis, North Holland.
Oblath, G. (1988) ‘Exchange Rate Policy in the Reform Package’ Acta Oeconomica, Vol. 39, pp. 81–93.
Sandblom, C.L. and J. Banasik (1985), ‘Economic Policy with Bounded Controls’, Economic Modelling, Vol. 2., pp. 135–148.
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 1991 Springer-Verlag Berlin Heidelberg
About this paper
Cite this paper
Bagdy, G. (1991). Optimal Stabilization with a Macroeconometric Model for Hungary: Investigating the Effects of Different Objective Functions and Time Horizons. In: Gruber, J. (eds) Econometric Decision Models. Lecture Notes in Economics and Mathematical Systems, vol 366. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-51675-7_3
Download citation
DOI: https://doi.org/10.1007/978-3-642-51675-7_3
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-540-54373-2
Online ISBN: 978-3-642-51675-7
eBook Packages: Springer Book Archive