Adaptive control in economics

The following definition of Economics is given by P. A. Samuelson: "Economics is the study of how men and society choose, with or without the use of money, to employ scarce productive resources, which could have alternative uses, to produce various commodities over time and distribute them for consumption, now and in the future, among various people and groups in society." Thus the study of economics is related to that of allocating scarce resources for alternative uses. This motivates the use of mathematical optimization techniques in economic problems such as consumer behavior, planning of production and inventory, economic growth, portfolio selections and many other things. The use of control theory seems to be a natural extension when one is interested in investigating the effect of certain changes on the whole motion or behavior over time of the economic system under investigation. When there are random variables or stochastic processes which may be involved in the economic system, the methods of stochastic control would seem to be appropriate. In the study of economics, one important class of problems is that of investigating the effects of a change (sometimes in an unknown way) in some internal parameter on the behavior of the system over time. For such a study, the concepts and methods of adaptive control are extremely valuable.