Optimal Stabilization Policies for Decentralized Macroeconomic Systems with Conflicting Targets
The relationships between economic variables in large-scale models are quite complex, and a realistic policy and planning scheme is definitely characterized by an informationally decentralized structure. On the most general level, the state of the system is affected by the actions of several decision makers. The solution to such a problem is possible only under certain decentralization of the policy planning decision making. On the other hand, the traditional policy and planning (Refs. 1, 2) are handled in a centralized way that is set up by the optimal control problem with classical information structure (Ref. 3). In such a scheme, all the information necessary to make an optimal decision is assumed to be available to the central planning agency.
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