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Control Theory and Macroeconomic Policy
Author(s) -
HOLLY SEAN
Publication year - 1982
Publication title -
economic outlook
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.1
H-Index - 8
eISSN - 1468-0319
pISSN - 0140-489X
DOI - 10.1111/j.1468-0319.1982.tb00777.x
Subject(s) - unemployment , economics , government (linguistics) , control (management) , balance of payments , macroeconomics , exchange rate , public economics , management , linguistics , philosophy
This Briefing Paper examines the contribution that control theory can make to our understanding of macroeconomic policy. Control theory is an area of study, orginally developed in engineering, which has since been applied to a very wide range of problems not only in engineering but also in biology. ecology, physiology, space exploration and economics. The kinds of questions in economics which conrrol theory could help us to answer include: what objectives should the government be pursuing, infation or unemployment or both, and by what means? what instruments should be used and in what combinations? should the government adopt targets for the money supply or the exchange rate, or concentrate on unemployment and the balance of payments?