The interests of economists in educational systems have taken two directions: (1) Concern for the interchange of resources between educational systems and the national economy, and (2) an interest in the production of education. In expressing the resource interchange, economists rely on the language of productivity. Of concern is the global contribution of educational systems to national economic efficiency. This type of analysis is relevant to such decisions as whether more or less money should be spent for education and how money should be allocated within educational systems. Model building is essential to systems analysis, and the models used for this type of study are cost-benefit models. Economic systems analysis is now being directed to an examination of the internal efficiency of education, which involves analysis of the way in which education is produced. This focus requires schools to be thought of as productive systems with interrelationships among people, units of space, and equipment determining the efficiency of the process. An administrator's production function is developed and input-output studies, based on large-scale cross-sectional statistical analysis, are used to provide empirical guidelines for the improvement of allocation within educational units. (TT)