For the last two decades the governments of most Western countries have been carrying out some degree of conscious control over their economies with the purpose of overcoming the severe fluctuation in the general level of economic activity and employment which plagued all free enterprise countries for a century or more before the First World War and which reached catastrophic proportions in the inter war years. A fair degree of success has been achieved. In Britain the range of variation in unemploy- ment since the last war has been about 2 per cent, compared with about 10 per cent in the typical cycles of the century before the First World War and more than 20 per cent in the interwar period. The range of the percentage variation in total output about its trend has, however, been greater; about 8 per cent, or four times that of unemployment. This degree of success is probably sufficient to permit the survival of free enterprise economic systems and democratic forms of government, but further improvement is clearly desirable.

The results of research in model building and econometric estimation are being used by government departments, though as yet in a rather rudimentary way, in the practical task of controlling economic fluctuations.