Abstract
The stochastic aspects of control theory raise some fundamental issues in modeling and estimating economic systems. Reasons are twofold. Economic data represent observed behavior, unlike the physical and engineering systems which represent regulatory and experimental mechanisms. Thus in servomechanism and feedback systems physical realizations due to control may be directly analyzed. But in economic systems this is almost impossible. Secondly, the objectives of performance are more implicit in economic systems. With several agents these objectives may in many cases differ to a significant degree; hence there is the need to analyze the problems of coordination in order to achieve some measure of consistency among different policies. We would analyze here some of these fundamental issues of control theory as applied to economic models.
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© 1997 Springer Science+Business Media New York
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Sengupta, J.K., Fanchon, P. (1997). Economic Implications of Stochastic Control. In: Control Theory Methods in Economics. Springer, Boston, MA. https://doi.org/10.1007/978-1-4615-6285-6_5
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DOI: https://doi.org/10.1007/978-1-4615-6285-6_5
Publisher Name: Springer, Boston, MA
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