Problems and Paradoxes in Economic and Social Policies of Modern Welfare States

Relationships between economic growth rates and the expansion of welfare expenditures in Western nations are examined. The point is made that real gross national product grew rapidly from about 1959 until about 1973, but that since 1973 it has either grown slowly or not at all, while welfare expenditures and entitlements have continued to escalate. Forecasts of a variety of important economic variables in these countries for the near term are presented and discussed, and it is concluded that despite the current modest economic improvement, difficulties in funding welfare states will continue throughout the remainder of the 1980s. Some consideration is given to problems in welfare states to the end of the century, and further difficulties in funding and managing these states are forecast for this period as well. Problems of welfare states are not regarded as short-term by-products of maladjustments experienced in the Western world in the last 10 years but rather as long-term characteristics.Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/67103/2/10.1177_000271628547900102.pd

On optimal control and macroeconomic policy

Control theory has important contributions to make to the theory of macro-economic policy. These include a unified view of estimation, forecasting and control and a consequently clearer focus in identifying performance criteria. Further, the methods of control theory imply objectivity and a need for assumptions to be made explicit. By contrast, the UK lacks a research body for forecasting and policy evaluation detached from doctrinal or methodological commitment. Engineering control methods, however, diverge from those wholly acceptable to economic systems in that, in the latter, the controller is himself part of the system he controls and some of his controls operate only indirectly. A further difference is that economics cannot as yet furnish the controller with reliable models of system behaviour linking policy instruments to set targets.