Showing papers in "Economics of Planning in 1973"

The use of RAS and related models in manpower forecasting

Abstract: With the increasing availability of statistics describing the occupational structures of different industries manpower forecasters are beginning to develop more sophisticated models. The economic rationale of such models has tended to be obscured by the mathematics involved and an understandable eagerness to put the data to use in forecasting. In addition, the systematic testing of the explanatory power of these models has been neglected where it has not been hampered by the shortage of data series. The RAS model has featured prominently in manpower discussions and this paper attempts an evaluation of its predictive ability and economic interpretation subject to the limits imposed by the data available for the British engineering industry. It is argued that such a model plays a useful initial role in the development of models for sectoral manpower forecasting but must lead on to a more sensitive treatment of the labour market and the decision problem of investing in human capital.

A dynamic optimization model of the Soviet enterprise

Abstract: Drawing upon an extensive institutional literature on the Soviet enterprise, several economists have recently explored theoretical models of this form. A drawback of the previous models has been their basically static orientation. This makes it difficult to provide a realistic description in formal terms of the well-known dynamic trade-off of the Soviet enterprise manager. This trade-off is implicit in the fact that high overfulfilment of the plan goal in the current period is desirable in the short term to the enterprise manager since it increases his current reward, but less advantageous in the long term because it increases the future plan goals which provide the standard on which future rewards are based. The present model is an explicit dynamic optimization model which allows for the incorporation of this feature, by making the utility of the manager partially dependent on the difference between output and the plan goal output, where plan goal output is based on previous period output, and requiring maximization of utility over a dynamic interval. Phase plane analysis is utilized to explore the properties of the optimum solution. Some implications are drawn from the basic model regarding behavior under these conditions. For example, it is unlikely that the solution path of the manager will involve fulfilment of the plan in every period during his tenure in office.

A further procedure for ordering an input-output matrix: some empirical evidence

Abstract: In a recent paper Ghosh and Sarkar [5] have developed a model of input-output systems as spatial configurations. Roy has proposed a more efficient solution method; but computation time still increases factorially which rules out its use for large matrices. [15] This note shows that the problem they have formulated belongs to a class of discrete programming problems known as placement or assignment problems. Several natural extensions are briefly discussed. More importantly, an efficient algorithm for the quadratic assignment problem is used to compute the optimal ordering of five comparable input-output matrices (US, Norway, Japan, Italy, India). These preliminary empirical results do show rather stable assignment patterns for the industries; and certain clusters of industries are shown to emerge as hypothesized by Ghosh and Sarkar.

A model for demographic mobility analysis under patterns of efficient employment

Abstract: The primary objective of this paper has been to provide a broadened framework for combining economic and demographic planning in a way which is also consistent with planning and accounting models developed and employed by both demographers and economists. In addition we also want to have this same framework available for extension to other types of multi-dimensional social-economic planning possibilities. One set of such examples may be found in the work by Stone [28], Wilson and Rees [34] and the United Nations' current program for developing systems of social and demographic accounts for possible use in new and improved approaches to country development planning. Another example, which, though broader, is also somewhat more theoretical may be found in [25] where explixit use is made of the E matrix for linking economic and demographic dimensions in planning applications.

The efficiency of decomposition vs direct solution with implications for the question of decentralized or centralized planning

Abstract: The investigation provides overwhelming evidence that decomposition tends to become increasingly more efficient than direct solution as the number of subproblems becomes greater

The microallocative impact of the Hungarian economic reform of 1968: Some evidence from the export sector

Abstract: We have investigated the allocative efficiency of the Hungarian export sector in both pre-reform and post-reform years. The results indicate that, although misallocation due to bilateral currency constraints was reduced by the reform, the overall efficiency of the export sector declined significantly. While the failure of the reform in a single, although from the Hungarian viewpoint, critical sector of the economy is not direct evidence of the failure of the entire reform, it does indicate that successful reforms may be more difficult to achieve than either western or socialist economists have anticipated.

The econometric forecasting model of Czechoslovakia

Abstract: The result of the construction, estimation, testing and forecasting uses of the VVS-2 model testify to the expediency of using comprehensive econometric models in socialist economy. The VVS-2 model expresses at a satisfying rate of accuracy the quantitative relations between the fundamental indicators of Czechoslovak economy and has produced satisfactory results also in calculating short-term forecasts. Some new methods and computer programs that have been developed and employed for model estimation may be considered a contribution towards the development of applied econometrics in socialist countries.

Uncertainty, the structure of production and the pattern of trade of centrally planned economies

Abstract: In this paper we have demonstrated that terms of trade uncertainty imposes a welfare loss on a centrally planned economy by reallocating resources toward the production of import substitutes and domestic consumption of exportables and a consequent decrease in the volume of trade. We have also shown that the centrally planned economies have developed a number of institutions, such as trade agreements and pricing rules, designed to minimize the losses caused by terms of trade uncertainty. Finally, we have suggested that the behavior of these economies during the post-Warperiod is consistent with welfare maximization under terms of trade uncertainty.

Welfare gains from optimization in dynamic planning models

Abstract: This paper compares the results of two multisectoral models used to plan the dynamic consistency of sectoral investment. Solution of an optimizing model forecasts a frontier of the economy's future choice set. This frontier represents a ten year welfare gain only 2 or 3 percent greater than any investment program simulated by a dynamic Leontief system. The paper explains what efficient behavior accounts for the “better” performance of the optimizing model. Developing dynamic programming models is costly in terms of data, computational complexity, man-machine interaction, and solution interpretation. Therefore, it is recommended that the lessons derived by working with the dynamic LP be applied to improve the planner's control of the less expensive input/output simulation model.