Linear optimal control of national econometric models

A control optimization approach is developed in this paper for the purpose of investigating the impact of alternative development strategies on the national economy of Egypt. Basic to this approach is the formulation of an aggregate econometric model and the manipulation of its performance as a linear quadratic tracking problem. The model comprises three major sectors ; namely agriculture, industry and services. Data processing and model parameter estimation and implementation are performed for the period 1961–1976 and further projected to the period 1976–1980. In light of the assumptions made, the obtained results are interpreted and found to be satisfactory.