Quadratic open-loop optimal control of economic systems

This paper exploits the formal analogy between least-squares estimation and quadratic open-loop control to impose a variety, of restrictions, to gain insight into problems of numeric instability, and to propose indexes of policy effectiveness and the importance of instrument costs to the solution. In addition, it provides an open-loop stochastic control solution with computational advantages in certain situations. Although the emphasis is on control problems in economics, the results are believed to be of general interest.