A mathematical model has been derived for the dynamic behavior of the coaxial-flow gaseous-core nuclear reactor system. The equations were derived from elementary neutron, heat, and mass balances on the components of the system, and from correlations presented in previous work. The system response for positive reactivity insertions, perturbations in the propellant and fuel flow rates at the cavity inlet, and for termination of the moderator primary coolant flow has been predicted. Present control technology can be invoked to control the reactor.