General Seminar - Serguei Maliar

Informed Actor--Critic Method for Optimal Control in Economic Dynamics

Abstract: This paper applies deep reinforcement learning to high-dimensional optimal control in dynamic economic models. We introduce an informed actor--critic (iAC) framework that embeds structural equations and constraints directly into the policy optimization loop. Unlike standard model-free reinforcement learning algorithms that treat the economy as a black box---relying entirely on data-driven simulation---the iAC method leverages analytical economic transitions. Computational applications to benchmark consumption--savings, Krusell--Smith, and overlapping-generations economies show that iAC reduces the need for exploration noise and provides a precise, scalable, and sample-efficient framework for complex macroeconomic control problems.