Evaluation of catch-up paths by an uncertain dynamic game model

Ilona Cserháti; Éva Gyurkovics; Tibor Takács

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arXiv · 2512.15723

Evaluation of catch-up paths by an uncertain dynamic game model

Ilona Cserháti·Éva Gyurkovics·Tibor Takács

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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.

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Ilona Cserháti, Éva Gyurkovics, Tibor Takács. 2025-12-04. Evaluation of catch-up paths by an uncertain dynamic game model. https://arxiv.org/abs/2512.15723

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