The 1 reference context in paper Christopher F. Baum, Meral Karasulu (1997) “Monetary Policy in the Transition to a Zero Federal Deficit” / RePEc:boc:bocoec:363

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    In summary, the model would appear to be reasonably well behaved, and capable of being used in an out-of-sample period to reflect the interactions of the real and financial sectors in the context of fiscal discipline and anti-inflation policy. 4 Optimal Monetary Policy Responses to Fiscal Discipline The framework in which we pose an optimal policy problem is that developed by
    Chow (1975, 1981)
    as an elaboration of the stochastic, dynamic linear-quadraticGaussian (LQG) optimal control framework. In a standard LQG exercise, the expectation of a multiperiod quadratic loss function is minimized, subject to the constraints posed by a linear econometric model, with stochastic elements arising from Gaussian errors.
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