Adaptive Control for Economic Models Revisited

This paper revisits an area of economic research that was very active some years ago and, after a quiet period, is once again becoming active. Adaptive control models consider not only additive uncertainty but also mulitplicative uncertainty in the model parameters as well as measurement error. In this context there is consideration of the effect of control (policy) action not only on reaching desireable targets but also on the learning effects on the parameters induced by the control action. Thus this area is also sometimes called "dual" control