TY  - JOUR
AU  - McKibbin,Warwick J.
AU  - Roubini,Nouriel
AU  - Sachs,Jeffrey
TI  - Dynamic Optimization in Two-Party Models
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 2213
PY  - 1987
Y2  - April 1987
UR  - http://www.nber.org/papers/w2213
L1  - http://www.nber.org/papers/w2213.pdf
N1  - Author contact info:
Warwick McKibbin
3 Grey Street
Deakin ACT 2600 AUSTRALIA
E-Mail: wmckibbin@msgpl.com.au

Nouriel Roubini
Department of Economics, KMC 7-83
Stern School of Business, New York University
44 West 4th Street
New York, NY  10012
Tel: 212/998-0886
Fax: 212/995-4218
E-Mail: nroubini@stern.nyu.edu

Jeffrey D. Sachs
The Earth Institute at Columbia University
314 Low Library
535 West 116th Street, MC 4327
New York, NY  10027
Tel: 212/854-8704
Fax: 212/854-8702
E-Mail: sachs@columbia.edu
AB  - The goal of this paper is to study the problem of optimal dynamic policy formulation with competing political parties. We study a general class of problems, in which the two competing political parties have quadratic intertemporal objective functions, and in which the economy has a linear structure and a multidimensional state space. For the general linear quadratic problem we develop a numerical dynamic programming algorithm to solve for optimal policies of each party taking into account the party's objectives; the structure of the economy ; the probability of future election results; and the objectives of the other political party.
ER  -