This work offers the mathematical foundation and theory required for studying in depth the stability and optimal control of systems whose history is taken into account. In this second edition the economic application is enlarged, and explored in some depth, and there is a new appendix.

This monograph derives from familiar economic principles the dynamics of national income, the interest rate, employment, the value of capital stock, prices, and the cumulative balance of payments. This is a Volterra neutral integrodifferential game of pursuit. The quarry control is government intervention in the form of taxation, control of money supply, tariffs, foreign credit, interest equalization tax, preferential trade agreements (which reduce trade barriers and enhance trade flows between nations), transportation and distance between trading partners. The work provides conditions for...