Working papers:
Dynamic Optimization in Two-Party Models
Warwick J. McKibbin; Nouriel Roubini; Jeffrey D. Sachs
Downloads:
- Title:
- Dynamic Optimization in Two-Party Models
- Author(s):
-
McKibbin, Warwick J.
Roubini, Nouriel
Sachs, Jeffrey D. - Date:
- 1987
- Type:
- Working papers
- Department:
- Earth Institute
- Permanent URL:
- http://hdl.handle.net/10022/AC:P:8241
- Part Number:
- 2213
- Publisher:
- National Bureau of Economic Research
- Publisher Location:
- Cambridge, Mass.
- Abstract:
- The goal of this paper is to study the problem of optimal dynamic policy formulation with competing political parties. We study a general class of problems, in which the two competing political parties have quadratic intertemporal objective functions, and in which the economy has a linear structure and a multidimensional state space. For the general linear quadratic problem we develop a numerical dynamic programming algorithm to solve for optimal policies of each party taking into account the party's objectives; the structure of the economy; the probability of future election results; and the objectives of the other political party.
- Subject(s):
-
Political science
Economic theory
- Item views:
- 106