Role of control and system theory in economics

While it is no doubt appropriate for this panel to discuss a subject as extensive as the role of control and system theory in economics, prudence requires that I pursue a somewhat more modest objective. Consequently I shall confine my remarks to the application of control theory to macroeconomies, and more narrowly yet to short run macroeconomic policy. The subject area remains vast, of course; perhaps too vast to advance any serious generalizations. Notwithstanding I offer the prediction that over the next decade control theory's contribution to macroeconomic policy determination will be more qualitative than quantitative. By this I mean it is unlikely that control theory will be used to generate specific policy directives to guide the economy in the same manner that it generates controls to guide a missile. Instead I believe it will be used primarily to provide insights as to the appropriate policy structure.