Does control system engineering have a place in economics? Do central banks use some form of engineering-style PID control systems/feedback loops to implement monetary policy? 

I'm an electrical engineering student taking microeconomics/macroeconomics and a lot of it, at least in terms of government policy to control inflation and interest rates, seems applicable to control systems engineering. However, I can't find a great deal of hard literature about it. 

Just as a for instance, one could use PID control to set an output, say inflation rate, to follow a specific course or remain steady given certain inputs, say GDP or interest rates or productivity, and given external disturbances, say Brexit. And even if the controller can't prevent catastrophes altogether, it can dampen the response so that sudden and jerky crashes are smoothed out.

Why or why not does economic policy use established control theory? If it does, what applications can this be seen?

Thanks in advance!
Economists have been exploring control theory applications to macro economics for decades. For example, here is a 40 year-old research paper written in 1976 on the topic.

top of page 2 (also numbered 171)


  In the past decade, a number of engineers and economists have asked the question: "If modern control theory can improve the guidance of airplanes and spacecraft, can it also help in the control of inflation and unemployment?"


Non-linear adaptive human behavior, uncertainty and governmental decentralization of control (i.e., democracy) are the main reasons I believe control theory has not become a more common tool for policy makers. Economics is simply not an exact science. Whereas engineering is more so. So control theory is more useful in the engineering discipline.