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Do Chemical Reactors Hold the Solution for Global Economic Crises?

Author

Listed:
  • Yochanan Shachmurove

    () (The City College of the City University of New York)

  • Reuel Shinnar (Deceased)

    () (Department of Chemical Engineering, The City College of the City University of New York)

Abstract

What can economists learn from dynamic partial control of chemical reactors? Both chemical reactors and the economy involve many variables that are difficult to fully predict or control. Thus, this paper suggests the use of partial control, which involves indentifying only the key variables that monitor the system. This idea of observing relatively few variables and enabling policy makers to better control the economy is in line with the contributions of Sargent and Sims, who use a limited number of variables to study monetary and fiscal policies. This approach enables a better distinction between cause and effect in the macroeconomy.

Suggested Citation

  • Yochanan Shachmurove & Reuel Shinnar (Deceased), 2012. "Do Chemical Reactors Hold the Solution for Global Economic Crises?," PIER Working Paper Archive 12-010, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
  • Handle: RePEc:pen:papers:12-010
    as

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    File URL: http://economics.sas.upenn.edu/system/files/12-010.pdf
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    References listed on IDEAS

    as
    1. Christopher A. Sims, 1989. "Models and Their Uses," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(2), pages 489-494.
    2. Erwin OOGHE & Andreas PEICHL, 2010. "Fair and efficient taxation under partial control: theory and evidence," Working Papers Department of Economics ces10.32, KU Leuven, Faculty of Economics and Business, Department of Economics.
    3. Adelheid Holl & Rafael Pardo & Ruth Rama, 2010. "Just-in-Time Manufacturing Systems, Subcontracting and Geographic Proximity," Regional Studies, Taylor & Francis Journals, vol. 44(5), pages 519-533.
    4. Friedman, Joseph & Shachmurove, Yochanan, 1997. "Co-movements of major European community stock markets: A vector autoregression analysis," Global Finance Journal, Elsevier, vol. 8(2), pages 257-277.
    5. Sargent, Thomas J, 1978. "Rational Expectations, Econometric Exogeneity, and Consumption," Journal of Political Economy, University of Chicago Press, vol. 86(4), pages 673-700, August.
    6. Furkan Emirmahmutoglu & Nezir Kose & Yeliz Yalcin, 2007. "The Kalman filter method for break point estimation in unit root tests," Applied Economics Letters, Taylor & Francis Journals, vol. 15(3), pages 193-198.
    7. Rita Pandey, 2005. "Estimating Sectoral and Geographical Industrial Pollution Inventories in India: Implications for Using Effluent Charge Versus Regulation," Journal of Development Studies, Taylor & Francis Journals, vol. 41(1), pages 33-61.
    8. Sang-Ho Lee & Iltae Kim, 2000. "Self-Selection and Optimal Nonlinear Effluent Charges," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 16(1), pages 1-14, May.
    9. Bo-sin Tang & Lennon H. T. Choy & Joshua K. F. Wat, 2000. "Certainty and Discretion in Planning Control: A Case Study of Office Development in Hong Kong," Urban Studies, Urban Studies Journal Limited, vol. 37(13), pages 2465-2483, December.
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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Econochemistry?
      by Economic Logician in Economic Logic on 2012-04-26 20:04:00

    More about this item

    Keywords

    partial control; perturbation; steady state; monetary policy; economic growth; manufacturing; sufficiency; chemical reactors; delayed information model; Monte Carlo simulation; Kalman filter estimation;

    JEL classification:

    • P1 - Economic Systems - - Capitalist Systems
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • F1 - International Economics - - Trade
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

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