The present paper is an attempt to extend Chetty's work. It derives a suboptimal adaptive control model for the demand for investment and labor by using invariant imbedding equations.

We develop a new Markov Chain Monte Carlo procedure for a time series regression model truncated by upper and lower bounds. The regression error term is assumed to follow an ARMA--GARCH process. We use a convergence diagnostics with a simultaneous test of mean and covariance stationarity and...