centrally planned economy


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Related to centrally planned economy: mixed economy

centrally planned economy

or

command economy

or

collectivism

a method of organizing the economy to produce goods and services. Under this ECONOMIC SYSTEM, economic decision-making is centralized in the hands of the state with collective ownership of the means of production, (except labour). It is the state that decides what goods and services are to be produced in accordance with its centralized NATIONAL PLAN. Resources are allocated between producing units, and final outputs between customers by the use of physical quotas.

The main rationale underlying state ownership of industry is the view that the collective ownership of the means of production ‘by the people for the people’ is preferable to a situation in which the ownership of the means of production is in the hands of the ‘capitalist class'who are able to exploit their élite position to the detriment of the populace at large. State control of industry enables the economy as a whole to be organized in accordance with some central plan, which by interlocking and synchronizing the input-output requirements of industry is able to secure an efficient allocation of productive resources. Critics of state-owned economic systems argue, however, that in practice they tend to be ‘captured and corrupted’ by powerful state officials, and that their top-heavy bureaucratic structures result in a highly inefficient organization of production and insensitivity to what customers actually want. See PRIVATE-ENTERPRISE ECONOMY, MIXED ECONOMY, NATIONALIZATION, COMMUNISM.

References in periodicals archive ?
The centrally planned economy has a unique and locally saddlepath stable steady-state equilibrium with positive long-run growth,
In a sense, these reforms legitimized what was already occurring following the collapse of the centrally planned economy. (53) The Kim regime refuses to call the economic measures "reforms," but prefers to characterize them as "utilitarian socialism." This includes the introduction domestically of market economy elements (called the July 1, 2001, measures) and in the international arena, the pursuit of normalization of relations with countries that have traditionally been hostile toward their country.
Comparing equations (7a) and (9a), one can see that the decentralized economy will fully replicate the dynamic time path of q in the centrally planned economy only if the tax rate on physical capital income is zero, that is, [[tau].sub.k] = 0.
The first chapter, an early study by a Czech economist during the Communist period does a brief and abstract economic analysis of why a centrally planned economy takes little notice of consumer feedback into consideration in the production of goods for society.
The relationship between Mongolia and North Korea has been strained in recent years as the reform-minded Mongolian government scuttled its centrally planned economy and sought closer ties with capitalist South Korea.
This is already being seen as a role model for more foreign investors to make inroads into the commercial sector, which has been sluggish and returning low profits for years due to outdated management practices left over from China's centrally planned economy.
Bashar Assad is serious about reforming the centrally planned economy).
North Korea is certainly not the first centrally planned economy to confront domestic food shortages.
"When you look at the competition, you see Singapore, which has done very well but is still a centrally planned economy," he said.
The region straddles the old Silk Road route, and as part of the Soviet Empire its resources had been developed to satisfy the needs of a centrally planned economy. The situation has changed rapidly since 1991, however, and progressive leadership is encouraging companies from the developed economies to form partnerships and alliances that will provide a basis for long-term growth and stability.
(The main problems are high site coverage, poor construction, inflexible layouts, and contamination.) The former centrally planned economy placed the emphasis of economic policy virtually entirely on production, with the provision of an adequate distribution system completely neglected.
Or should we be more practical and accept as a norm a set of market prices that are not believed to be seriously distorted by taxes, subsidies, monopoly power or other factors?(9) Similarly, in a centrally planned economy, should we use some adjusted factor cost prices as the benchmark or use shadow prices based on input-output tables?(10)

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