First published in 1971 this volume applies the tools of static and of dynamic analysis (outlined in The Stationary Economy and The Growing Economy) to the control of a dynamic economy. This involves a discussion of subjects such as the theory of indicative planning, and the planning by the government of its monetary, fiscal, and incomes policies for the purposes of the short-run stabilization of the economy and of ensuring the best long-run use of the community’s resources. Special emphasis is laid on the planning of such policies in conditions in which many future events remain inevitably uncertain.

This book considers these issues in relation to a competitive, free-enterprise economy; and little or no reference is made to problems of monopoly or of distinctions between social and private costs and benefits, due to indivisibilities and externalities in economic life.

Part 1: Some Basic Concepts  1. Uncertainty, Friction and Disequilibrium Growth  2. Environment, Expectations, Decisions, Controls and the State of the Economy  3. Identity, Technological and Behavioural Relations  4. Forms of Response and Time-Lag  5. Positive and Negative Feedback  Part 2: A Dynamic Model of the Economy  6. The Inadequacy of the Multiplier-Accelerator Model  7. A Seven-Sector Model  8. A Simplified One-Product Model  Part 3: The Theory of Indicative forecasting  9. Forecasting in the Absence of Environmental Uncertainties  10. Forecasting in Conditions of Environmental Uncertainty  11. Economic Efficiency in Conditions of Environmental Uncertainty  12. The Planning of Future Action  13. Some Problems in Indicative Planning Part 4: Government Control Planning  14. The Nature of a Governmental Control Plan  15. The Basic Components of Governmental Control Plan  16. The Application of the Principles of Control to a Particular Social Welfare Function: An Illustrative Case  17. The Decentralisation of Government Control Planning  18. An Indicative Control Plan  Part 5: Residual Uncertainty and Economic Stabilization  19. Residual Uncertainty and Public Policy: Proportional, Integral and Derivative Control  20. Money and Other Assets as a Safeguard Against Residual Uncertainty  21. Financial Intermediaries and the Qualities of Assets  22. Monetary Policy  23. Fiscal Policy  24. Price Stability Versus Full Employment