Evaluation of catch-up paths by an uncertain dynamic game model
Theoretical Economics
2025-12-19 v1
Abstract
To model the interaction of fiscal and monetary policy, a novel discrete-time, uncertain, infinite time horizon, dynamic game model is developed, where the uncertainties of expectations are modeled by unknown nonlinear but quadratically constrained deterministic functions. Cost-guaranteeing Nash strategies are defined for fiscal and monetary policy as two players. The model is suitable for comparative analysis of the development paths of catching-up economies. Specifically, we evaluate nine possible development paths for the Hungarian economy, where each path is characterised by a proxy for the debt-to-GDP ratio.
Cite
@article{arxiv.2512.15723,
title = {Evaluation of catch-up paths by an uncertain dynamic game model},
author = {Ilona Cserháti and Éva Gyurkovics and Tibor Takács},
journal= {arXiv preprint arXiv:2512.15723},
year = {2025}
}