Feedback A New Framework for Macroeconomic Policy
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ADVANCED STUDIES IN THEORETICAL AND APPLIED ECONOMETRICS VOLUME 10
Managing Editors: J.P. Ancot, Netherlands Economic Institute, Rotterdam, The Netherlands A.J. Hughes Hallett, University of Newcastle, U.K. Editorial Board: F.G. Adams, University of Pennsylvania, Philadelphia, U.S.A. P. Balestra, University ot Geneva, Switzerland M.G. Dagenais, University of Montreal, Canada D. Kendrick, University of Texas, Austin, U.S.A. J.H.P. Paelinck, Netherlands Economic Institute, Rotterdam, The Netherlands R.S. Pindyck, Sloane School of Management, M.I.T., U.S.A. H. Theil, University of Florida, Gainsville, U.S.A. W. Welte, University of Lodz, Poland Books by David Andrew Kendrick Programming Investment in the Process Industries Notes and Problems in Microeconomic Theory (with Samuel Bowles and Peter Dixon) The Planning of Industrial Programs (with Ardy Stoutjesdijk) Stochastic Control for Econom ic Models The Planning of Investment Programs in the Steel Industry (with Alexander Meeraus and Jaime Alatorre) GAMS: An Introduction (with Alexander Meeraus)
A complete list of this series is on the final page.
FEEDBACK A NEW FRAMEWORK FOR MACROECONOMIC POLICY by David A. Kendrick
1988
KLUWER ACADEMIC PUBLISHERS
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a member of the KLUWER ACADEMIC PUBLISHERS GROUP"
DORDRECHTI BOSTON I LANCASTER
Distributors for the United States and Canada: Kluwer Academic Publishers, 101 Philip Drive, Norwell, MA 02061, USA for the UK and Ireland: Kluwer Academic Publishers, MTP Press Limited, Falcon House, Queen Square, Lancaster LA 1 1RN, UK for all other countries: Kluwer Academic Publishers Group, Distribution Center, P.O. Box 322,3300 AH Dordrecht, The Netherlands
library of Congress Cataloging in Publication Data Kendrick. Dav1d A. Feedback a new framework for macroeconomIC policy I by David A. Kendrl ck .. p. c •. -- (Advanced stud1es in theoret1cal and applied econoletrics ; v. 10) Bibliography: p. Includes index. 1. Macroeconomics--Econometric Models.
I. Title.
II. SerIes. HB172.E.K45 1987 339.5--dc19
ISBN -13 :978-94-01 0-7733-0 DOl: 10.1 007/978-94-009-2746-9
2. Control theory.
87-20990 CIP
e-ISBN:978-94-009-2746-9
Copyright © 1988 by Martinus Nijhoff Publishers, Dordrecht. Softcover reprint of the hardcover 1st edition 1988 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publishers, Martinus Nijhoff Publishers, P.O. Box 163, 3300 AD Dordrecht, The Netherlands.
Preface In the past fifteen years a new field of research has emerged in economics: the application of control theory methods to macroeconomics and to microeconomics. The papers and books which have resulted from this research are important to the development of theoretical and applied economics. However, they are inaccessible to many with interest in economics because of the technical nature of the discussion. This book attempts to make the macroeconomic portion of this li
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