Monetary and Financial Planning for a Transitory Economy

This book analyses recent developments in macroeconomic policy modelling and optimal control methods. It analyses several types of optimal control systems and suggests a novel method of adaptive optimal control using Baysian approach when the expectation generating mechanisms can modify the probability structure and the response parameters of the model. The adaptive optimal control using Baysian method was applied to a structural adjustment policy model for the Indian economy. Recent development of the Indian economy and the effectiveness of monetary-fiscal-exchange rate policies during the plan periods were analysed. The adaptive control model for India provides several alternative plans in a mixed economy where the private sector can be regulated by monetary-fiscal instruments.