Rational Expectations, the Lucas Critique and the Optimal Control of Macroeconomic Models: A Historical Analysis of Basic Developments in the 20th Century
In this paper, we first consider the role of rational expectations, the Lucas critique and the policy ineffectiveness debate in economic applications of optimal control theory. The problem of time-inconsistency in optimal control of macro-economic models with rational expectations will then be analy...
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| Format: | Article |
| Language: | fas |
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Allameh Tabataba'i University Press
2011-03-01
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| Series: | فصلنامه پژوهشهای اقتصادی ایران |
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| Online Access: | https://ijer.atu.ac.ir/article_3308_63645b24dc9960f78f7689a1f8d6db7a.pdf |
| _version_ | 1797369402272776192 |
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| author | Masoud Derakhshan |
| author_facet | Masoud Derakhshan |
| author_sort | Masoud Derakhshan |
| collection | DOAJ |
| description | In this paper, we first consider the role of rational expectations, the Lucas critique and the policy ineffectiveness debate in economic applications of optimal control theory. The problem of time-inconsistency in optimal control of macro-economic models with rational expectations will then be analyzed. The impact of reputation and the stochastic environment on the problem of inconsistency in dynamic choice together with the question of how can the developments in optimal control of macroeconomic models with forward-looking expectations contribute to the practice of econometric model building are the other topics which are discussed. We have adopted a historical approach in this paper, and the scope of our analysis is confined to the basic contributions made in the 20th Century. |
| first_indexed | 2024-03-08T17:46:13Z |
| format | Article |
| id | doaj.art-a89f80cdda3a44f3999ee998851bcff5 |
| institution | Directory Open Access Journal |
| issn | 1726-0728 2476-6445 |
| language | fas |
| last_indexed | 2024-03-08T17:46:13Z |
| publishDate | 2011-03-01 |
| publisher | Allameh Tabataba'i University Press |
| record_format | Article |
| series | فصلنامه پژوهشهای اقتصادی ایران |
| spelling | doaj.art-a89f80cdda3a44f3999ee998851bcff52024-01-02T10:28:50ZfasAllameh Tabataba'i University Pressفصلنامه پژوهشهای اقتصادی ایران1726-07282476-64452011-03-01164619463308Rational Expectations, the Lucas Critique and the Optimal Control of Macroeconomic Models: A Historical Analysis of Basic Developments in the 20th CenturyMasoud Derakhshan0Ph.D in Economics, Associate Professor, Faculty of Economics, Allameh Tabatabaei UniversityIn this paper, we first consider the role of rational expectations, the Lucas critique and the policy ineffectiveness debate in economic applications of optimal control theory. The problem of time-inconsistency in optimal control of macro-economic models with rational expectations will then be analyzed. The impact of reputation and the stochastic environment on the problem of inconsistency in dynamic choice together with the question of how can the developments in optimal control of macroeconomic models with forward-looking expectations contribute to the practice of econometric model building are the other topics which are discussed. We have adopted a historical approach in this paper, and the scope of our analysis is confined to the basic contributions made in the 20th Century.https://ijer.atu.ac.ir/article_3308_63645b24dc9960f78f7689a1f8d6db7a.pdfrational expectationslucas critiquepolicy ineffectivenessoptimal control |
| spellingShingle | Masoud Derakhshan Rational Expectations, the Lucas Critique and the Optimal Control of Macroeconomic Models: A Historical Analysis of Basic Developments in the 20th Century فصلنامه پژوهشهای اقتصادی ایران rational expectations lucas critique policy ineffectiveness optimal control |
| title | Rational Expectations, the Lucas Critique and the Optimal Control of Macroeconomic Models: A Historical Analysis of Basic Developments
in the 20th Century |
| title_full | Rational Expectations, the Lucas Critique and the Optimal Control of Macroeconomic Models: A Historical Analysis of Basic Developments
in the 20th Century |
| title_fullStr | Rational Expectations, the Lucas Critique and the Optimal Control of Macroeconomic Models: A Historical Analysis of Basic Developments
in the 20th Century |
| title_full_unstemmed | Rational Expectations, the Lucas Critique and the Optimal Control of Macroeconomic Models: A Historical Analysis of Basic Developments
in the 20th Century |
| title_short | Rational Expectations, the Lucas Critique and the Optimal Control of Macroeconomic Models: A Historical Analysis of Basic Developments
in the 20th Century |
| title_sort | rational expectations the lucas critique and the optimal control of macroeconomic models a historical analysis of basic developments in the 20th century |
| topic | rational expectations lucas critique policy ineffectiveness optimal control |
| url | https://ijer.atu.ac.ir/article_3308_63645b24dc9960f78f7689a1f8d6db7a.pdf |
| work_keys_str_mv | AT masoudderakhshan rationalexpectationsthelucascritiqueandtheoptimalcontrolofmacroeconomicmodelsahistoricalanalysisofbasicdevelopmentsinthe20thcentury |