Sufficient conditions for dynamic path controllability of economic systems

In this paper sufficient conditions for target path controllability of dynamic economic systems in state-space representation are discussed. These conditions, though stronger than necessary, are much easier to verify than the well-known (but complicated) necessary and sufficient conditions for target path controllability. It is demonstrated that the computational gain in terms of practical application of the technical conditions is substantial. For example, by means of these conditions it is possible to prove the target path controllability of Buiter's 1979 rational expectations model of an open economy — a problem which has been an unresolved one up to now.