Control and Simulation of the Continuous Time Mundell-Fleming Model

The objective of this study is to confirm that the Mundell-Fleming model has controllability under standard suppositions of modern economics. We use the cybernetics method to establish a continuous time Mundell-Fleming model and then investigate the dynamic structure characteristic of the model and its control law design. Next, we obtain analytical solutions for the control law of the continuous time Mundell-Fleming model and perform some simulations. Our results show that the continuous time Mundell-Fleming system has complete observability, reachability, and controllability. In addition, we determined that the closed-loop poles of the model can be assigned arbitrarily, which makes the system asymptotically stable and able to achieve output regulation and good dynamic performance. We designed simulation experiments based on the requirements of the system and the economic aspects of the model parameters. Our simulation results verify the effectiveness of the control law for the Mundell-Fleming model.