In this paper a continuous time stochastic control model for an optimal choice of the public expenditure and taxation policy is developed in order to obtain an optimal level of welfare. We define welfare a situation in which the current income is as closed as possible to its full employment level. The mathematical tool we use is the Hamilton-Jacoby-Bellman equation applied to the minimization of an integral operator whose variable is described by a controlled stochastic differential equation.

A Stochastic Model for an Optimal Choice of the Public Expenditure and Fiscal Policy

PATRI', Stefano
2008

Abstract

In this paper a continuous time stochastic control model for an optimal choice of the public expenditure and taxation policy is developed in order to obtain an optimal level of welfare. We define welfare a situation in which the current income is as closed as possible to its full employment level. The mathematical tool we use is the Hamilton-Jacoby-Bellman equation applied to the minimization of an integral operator whose variable is described by a controlled stochastic differential equation.
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Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/11573/65379
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