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Applications of control theory to a Leontief - type planning model (English)

Dynamic multisector models are a familiar tool of the development planner. This paper discusses application of control theory to dynamic planning models. Optimal control theory offers itself as a possible alternative to linear programming in that, computationally, it easily handles dynamic relationships and various non-linearities. In the past, numerical applications have been limited partly by the awkwardness of control theory in handling inequality constraints and the high costs of solving systems with many state variables. The paper attempts a first step toward solving a large and realistic model at less cost than alternative linear programming models. It presents a formulation which will reduce the number of state variables and suggest an appropriate and efficient solution algorithm. It includes a detailed description of the dynamic properties of the open Leontief system without foreign trade or primary factor constraints; shows how realism can be added to the model, introducing foreign trade activities, human capital formation, and primary factors; and proposes an algorithm for solving the model both with and without inequality constraints.

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Citation

Blitzer, Charles Kim, H.

Applications of control theory to a Leontief - type planning model (English). Development Research Department discussion paper ; no. DRD 1 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/215571467980533836/Applications-of-control-theory-to-a-Leontief-type-planning-model