Objective functions and the complexity of policy design

DOI10.1016/0165-1889(87)90007-8MaRDI QIDQ1097156zbMATH OpenOpenAlexFDO

Authors Berç Rustem, K. Vela Velupillai

Publication date 1987

Published in Journal of Economic Dynamics and Control (Search for Journal in Brave)

Full work available at URL https://doi.org/10.1016/0165-1889(87)90007-8

zbMATH Keywords

constrained optimizationconstructing quadratic objective functionsinteractive procedurelinear and nonlinear macroeconomic decision modelspolicy designpolynomial time

Mathematics Subject Classification ID

Applications of mathematical programming (90C90) Decision theory (91B06) Economic growth models (91B62)

Review text

Two methods are analyzed for constructing quadratic objective functions for linear and nonlinear macroeconomic decision models. Both methods are iterative and involve interactions with the decision maker. One method generates optimal solutions, with respect to the current objective function, at each iteration. Optimality at each iteration gives this method certain desirable characteristics. The second method generates feasible solutions at each iteration but can be ensured to converge in polynomial time by involving Khatchiyan's linear programming algorithm. Exploiting the similarity between both algorithms leads to a modification of the first algorithm that generates optimal solutions at each iteration and also converges in polynomial time.

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Cites work

• scientific article; zbMATH DE number 3677572 (Why is no real title available?)
• scientific article; zbMATH DE number 3637614 (Why is no real title available?)
• Modifications and implementation of the ellipsoid algorithm for linear programming
• Objective functions and the complexity of policy design
• Polynomial algorithms in linear programming

Cited in

(6)

• Objective functions and the complexity of policy design
• The diagonalizability of quadratic functions and the arbitrariness of shadow prices
• Computability, complexity and economics
• On high-order differentiability of the policy function
• On Optimal Satisficing: How Simple Policies Can Achieve Excellent Results
• Interactive search for a global optimum in macroeconometric policy- making

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