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The Uncertainty Frontier as a Global Approach to the Efficient Stabilisation of Economic Systems: Experiments with the Micro-DMS Model

  • M. Deleau
  • C. Le Van
  • P. Malgrange
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Part of the Advanced Studies in Theoretical and Applied Econometrics book series (ASTA, volume 3)

Abstract

The application of optimisation methods to macroeconometric models is now current practice. In recent years, stress has been put on the potentialities of such methods for purposes of analysis (see Chow (1975)). In a previous article, we proposed some analytical results about the global’ stabilisation’ properties of a given economic model (Deleau and Malgrange (1979)). Our approach applies to a linear (or linearised) system with implicit) quadratic objective functions. It uses the concept of ‘uncertainty frontier’, which characterises ‘efficient’ stabilisations and gives a synthetic expression of the tradeoffs between objectives (e.g. how much do you ‘destabilise’ prices in the process of stabilising unemployment.

Keywords

Capacity Utilisation Uncontrolled Variable Foreign Demand Quadratic Objective Function Efficient Stabilisation 
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Copyright information

© Martinus Nijhoff Publishers. Dordrecht/Boston/Lancaster 1984

Authors and Affiliations

  • M. Deleau
    • 1
  • C. Le Van
    • 2
  • P. Malgrange
    • 2
  1. 1.Ministry of Economics and FinanceParisFrance
  2. 2.CNRSCEPREMAPParisFrance

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