Michel Deleau

Efficient stabilization of economic systems : some global analytical results for the linear quadratic case

Abstract This paper gives analytical results about the global properties of efficiently stabilized linear-quadratic systems. We prove that the process of computing optimal policies can be decomposed into a combinatorial process, any optimal policy being a linear combination of ‘extreme policies’ with remarkable weights. Very strong results are available when there is one instrument less than objectives, the ‘uncertainty frontier’ being then reduced to a hyperplane in the space of standard errors. It is proved furthermore that these results can be extended to dynamic stationary efficient stabilization. An illustration is given on the basis of a small macroeconometric model.

Information and contrastochastic dynamic economic policies

Abstract This study deals with some problems raised by the annual implementation, under uncertainty, of medium-term policies in the framework of French national planning. It is based on a classical linear-quadratic formulation. A stress is put on the problem of information about uncertain uncontrolled factors on which economic policy strategies can be based. Various policy schemes are thus defined and compared, one objective finding a simple strategy giving good results.