17 Facts About Economic planning

Economic planning is a resource allocation mechanism based on a computational procedure for solving a constrained maximization problem with an iterative process for obtaining its solution.

Physical planning involves economic planning and coordination conducted in terms of disaggregated physical units whereas financial planning involves plans formulated in terms of financial units.

Classical conception of socialist economic planning held by Marxists involved an economic system where goods and services were valued, demanded and produced directly for their use-value as opposed to being produced as a by-product of the pursuit of profit by business enterprises.

For Marxists in particular, Economic planning entails control of the surplus product by the associated producers in a democratic manner.

Economic analysts have argued that the economy of the Soviet Union actually represented an administrative or command economy as opposed to a planned economy because planning did not play an operational role in the allocation of resources among productive units in the economy since in actuality the main allocation mechanism was a system of command-and-control.

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Two contemporary models of decentralized planning are participatory economics, developed by the economist Michael Albert; and negotiated coordination, developed by the economist Pat Devine.

Material balance planning was the type of economic planning employed by Soviet-type economies.

Material balancing involves a Economic planning agency taking a survey of available inputs and raw materials and using a balance-sheet to balance them with output targets specified by industry, thereby achieving a balance of supply and demand.

Large corporations use Economic planning to allocate resources internally among their divisions and subsidiaries.

Development models of the East Asian Tiger economies involved varying degrees of economic planning and state-directed investment in a model sometimes described as state development capitalism or the East Asian Model.

Economy of Singapore was partially based on government economic planning that involved an active industrial policy and a mixture of state-owned industry and free-market economy.

Under dirigisme, France used indicative Economic planning and established a number of state-owned enterprises in strategic sectors of the economy.

The concept behind indicative planning is the early identification of oversupply, bottlenecks and shortages so that state investment behavior can be quickly modified to reduce market disequilibrium so that stable economic development and growth can be sustained.

Soviet-type economic planning took form in the 1930s and largely remained unchanged despite mild reforms until the Soviet Union's dissolution.

Soviet economic planning was centralized and organized hierarchically, with a state planning agency such as the Gosplan establishing target rates for growth and the Gossnab allocating factor inputs to enterprises and economic units throughout the national economy.

Economic planning information, including consumer demand and enterprise resource requirements, were aggregated to balance supply from the available resource inventories, with demand based on requirements for individual economic units and enterprises through a system of iterations.

Need for long-term economic planning to promote efficiency was a central component of Labour Party thinking until the 1970s.