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.
Details
-
Author
Blitzer, Charles, Kim, H.
-
Document Date
1973/05/31
-
Document Type
Departmental Working Paper
-
Report Number
DRD1
-
Volume No
1
-
Total Volume(s)
1
-
Disclosure Date
2010/07/01
-
Disclosure Status
Disclosed
-
Doc Name
Applications of control theory to a Leontief - type planning model
-
Keywords
control theory;dynamic system;foreign exchange;production function;average interest rate;optimal control theory;human capital formation;shadow price;sector model;foreign debt;nominal control;consumption good;foreign trade;linear equation;difference equation;aggregate investment;investment demand;upper bind;bracket term;linear model;intermediate input;foreign borrowing;capital good;competitive capital;trade pattern;linear function;future consumption;optimal investment;o model;consumption path;gross investment;capital stock;dynamic model;discussion papers;labor supply;dynamic relationship;supply balance;consumption demand;investment good;diagonal matrix;constant marginal;labor input;production relation;sectoral planning;quadratic equation;quadratic programming;optimization problem;marginal savings;primary factors;
- See More
Downloads
COMPLETE REPORT
Official version of document (may contain signatures, etc)
- Official PDF
- TXT*
- Total Downloads** :
- Download Stats
-
*The text version is uncorrected OCR text and is included solely to benefit users with slow connectivity.
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