Stochastic Optimal Control and the U.S. Financial Debt Crisis

Shastic Optimal Control (SOC)—a mathematical theory concerned with minimizing a cost (or maximizing a payout) pertaining to a controlled dynamic processunder uncertainty—has proven incredibly helpful to understanding and predicting debt crises and evaluating proposed financial regulation and risk management.Shastic Optimal Control and the U.S. Financial Debt Crisisanalyzes SOC in relation to the 2008 U.S. financial crisis, and offers a detailed framework depicting why such a methodolog…