Book contents
- Frontmatter
- Contents
- Preface
- Part I The static theory of policy
- Part II Dynamic fixed objectives: on hitting points and paths
- 4 The dynamic policy problem: models and objectives
- 5 Controllability properties of dynamic policy models
- 6 Observability properties of dynamic policy models
- 7 The dynamic theory of stationarity objectives
- 8 The dynamic theory of path objectives
- 9 Policy design for path objectives
- 10 Rational expectations and the theory of policy
- Part III Dynamic flexible objectives: on tracking points and paths
- References
- Index
6 - Observability properties of dynamic policy models
Published online by Cambridge University Press: 05 November 2011
- Frontmatter
- Contents
- Preface
- Part I The static theory of policy
- Part II Dynamic fixed objectives: on hitting points and paths
- 4 The dynamic policy problem: models and objectives
- 5 Controllability properties of dynamic policy models
- 6 Observability properties of dynamic policy models
- 7 The dynamic theory of stationarity objectives
- 8 The dynamic theory of path objectives
- 9 Policy design for path objectives
- 10 Rational expectations and the theory of policy
- Part III Dynamic flexible objectives: on tracking points and paths
- References
- Index
Summary
Introduction
Of ultimate concern to the theory of policy, as conceived in this book, is the operation of instruments on targets. For the dynamic theory of policy, the linear system representation interposes the system state between the instruments as inputs and the targets as outputs. Chapter 5 has just finished examining the operation of the instruments on the states. Chapter 6 now completes the link from instruments to targets by examining the operation of the states on the targets. Just as Chapter 5 associates various controllability properties with the ability of the instruments to affect the states, in similar fashion Chapter 6 associates various observability properties with the ability of the states to affect the targets.
But whereas state controllability is an existence property, state observability is a uniqueness property. The question to be studied is not, as in Chapter 5, whether the instruments can be adjusted intertemporally to effect an arbitrary state transfer; but rather, given that a particular intertemporal target transfer has occurred, is there a unique intertemporal state transfer responsible for this target transfer? Why such a uniqueness question is of recurring importance, and precisely how it pairs with the existence question, are topics to be resolved during this chapter.
Some heuristic motivation can be provided with the benefit of hindsight.
- Type
- Chapter
- Information
- The Theory of Economic PolicyStatics and Dynamics, pp. 185 - 204Publisher: Cambridge University PressPrint publication year: 1982