Nonlinear optimal control for a business cycles macroeconomic model of linked economies. Issue 2 (3rd April 2018)

• Record Type: Journal Article
• Authors: Rigatos, G.; Siano, P.; Loia, V.; Ghosh, T.; Krawiec, A.
• Is Part Of: Cyber-physical systems. Volume 4:Issue 2(2018)
• Page Start: 116
• Page End: 136
• Publication Date: 2018-04-03
• Subjects: Coupled economies. multi-agent Kaldor-Kalecki macroeconomic model -- nonlinear optimal control -- approximate linearisation -- Riccati equation -- global stability; Cooperating objects (Computer systems) -- Periodicals; Internet of things -- Periodicals; 006.22
• DOI: 10.1080/23335777.2018.1501860
• Languages: English
• ISSNs: 2333-5777

Abstract

ABSTRACT: The article proposes nonlinear optimal control for a multi-agent Kaldor-Kalecki macroeconomic model of linked economies. The Kaldor-Kalecki model has been analysed mostly by considering closed economies in which interactions with other economies or financial institutions are overlooked. In the present article, a system of linked economies is considered in which the Kaldor-Kalecki model of each individual economy is retrofitted with a fraction of the GDP produced by the other economies. In this context a nonlinear optimal control scheme is developed for the entire financial system consisting of the interacting economies. The global stability properties of the control method are proven through Lyapunov analysis.