Control Theory In The Study Of The Effect Of Macroeconomic Volatility And Policy

With the relationship between economic development and politics, environment and international events strengthened, as well as the globalization speeded up, the economic fluctuation show itself with complexity and randomicity , and has become the important factors that threaten the economic stability and safety. How to smooth the fluctuation and reduce the loss of welfare? There are always argument about " endogenesis " and "ectogenous" , "interference" and "freedom", but the practices of many countries development have indicated that the government interfering the economy appropriately and timely can indeed smooth the fluctuation and stabilize the economy.Our country has still been in the period of system transition, the problems brought by the former innovation have been presented gradually, the entrance to the WTO means open more widely, the next important step is to improve the models of increase. Since that, many impacts outside would threaten the continuous and steady economic increase. Our country has established the national economic system which consist of government enterprises and residents, etc. it can run in phase. What we have to consider firstly is how to estimate the resistant ability of system, them we need to research how we design the macroeconomic policy which can promote the system ability to smooth the fluctuation. Finally, how efficient of the designed policy is the termination of the logic.Cybernetics is the main branch of the control theory, which are predominant in system adjusting policy designing and dynamic analysis, and has been used widely on the analysis about economic problems. We try to put the control theory ideas and ways to be used in this paper, and do research on analysis of national economic system stability, quantitative designing of macroeconomic policies and the estimate of policy validity.The statements from the school of real business cycle about the economic period have built the bases of using control theory to solve economic problems. The main ideas of that suggest that the fluctuation (period) were brought by some real factors' impacts which are outside from system, they are called as "external impacts". Interfered with which, the economic system show itself as continuous fluctuation. Building the economy as a controlled system, quantifying the external impacts (whatever long-term or short-term) as the external inputs (interferences), researching the system responses under them, this paper make this process of analyzing economic problem with control theory possible.