A self-organizing model of the British economy for control with optimal prediction using the balance-of-variables criterion

A set of self-organized linear differential equations describing the economic system of Britain in 1965 is developed using the GMDH (the group method of data handling). The characteristic variables of the system were taken from the work of Parks and Pyatt. For selection the new criterion of the balance of variables was used. This assures the minimum deviation of the solution on the prediction interval (from 1965 to 1969). The equations are used to define the predicted optimal control when the moving interval of prediction is equal to four years. To synthesize the optimum control on the moving prediction interval, a simplified variant of the maximum principle is used.