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
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    Chow (1975, 1981)
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    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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