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Achieving Macroeconomic Goals

Mike O'Brien

Institute For Defense Analyses

Review of Economic Studies 1982

Two basic approaches to using dynamic econometric models to formulate macroeconomic policy are generally in use. These are: invertible transfer function methodology and optimal control methodology. In this paper a technique for determining dynamic growth paths is presented. The result of the application of this technique is the synthesis of the two approaches into a single approach yielding a policy with more desirable characteristics than was previously possible. An example of the use of this synthesis technique using Pindyck's model is presented.

DOI
10.2307/2297145
Volume
49 (1)
Pages
117
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