Abstract
The solution of the optimal control problem for nonlinear systems may be properly approximated by an iterative procedure, in which the optimal control algorithm is subsequently applied to specific linearizations of the original system. The weights for target and control variables used in the optimization functional may be derived from the variation coefficients of their deviations from nominal values and from the assigned relative importance of variables in a given variant.
The practical application of the optimal control of a nonlinear system is demonstrated using a nonlinear econometric model of the Czechoslovak economy, consisting of 32 equations with 74 variables. The authors present the scenarios of the baseline projection and three alternative development strategies for the Czechoslovak economy up to the year 2000, and the results of the optimal control simulations of individual strategies. The results of the simulations have yielded useful information about the possible effects and costs of selected development strategies. The recommended procedure may be applied also to other alternative strategies, using different models and scenarios.
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Šujan, I., Vašiček, O. (1991). Nonlinear Optimal Control Simulations of Development Strategies. 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_7
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DOI: https://doi.org/10.1007/978-3-642-51675-7_7
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