Money, Banks and Finance in Economic Thought

How Macroeconomists Lost Control

Chatelain Jean-Bernard, Université Paris 1 Panthéon Sorbonne, PSE
Ralf Kirsten, ESCE International Business School, 10 rue Sextius Michel, 75015 Paris

This paper explores the history of the mathematical tools using feedback rules for macroeconomic stabilization policy from the perspective of the field of control. It describes the path which led mainstream macroeconomics to be the only field of research in all sciences using control which decided to claim stabilization using positive-feedback rule parameters that destabilize the dynamic system of the macroeconomic policy targets.

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Keywords: Determinacy, Stability, Control, Stabilization Policy, Negative-feedback, Positive-feedback

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