Ranking of Price and Quantitiy Controls Under FutureUncertainty

摘要

Consider a country producing two commodities. Foreign demand for its export is supposed to bernknown perfectly at present but becomes less and less certain over time. The country maximizes itsrnnational income by controlling either its export price, export level, or value of imports. The questionrnto ask is whether the three control means are equivalent in their effects on the national income and, ifrnnot, how they can be ranked. The paper examines the problem in the context of stochastic optimalrncontrol with Brownian motion in demand uncertainty.