Stackelberg games and macroeconomic planning

A review is presented of the dynamic input-output model of macroeconomic systems. By using the input-output approach, a dynamic input-output model with two control variables is presented. With the appropriate performance objective (such as the consumption-tracking control criterion), a dynamic game model of the macroeconomic system is constructed. The Stackelberg strategy concept is introduced to the dynamic game. By using the standard variational techniques, the necessary conditions for the existence of the open-loop Stackelberg strategy is derived, and the open-loop Stackelberg strategy is given. An illustrative example is provided