Market Equilibrium in a Model of a Planned Economy of the Soviet Type: A Proof of Existence and the Results of Numerical Simulations
Posted: 7 Sep 2006
Abstract
We construct a one period model of an economy based upon a Soviet-type system, and examine a modified notion of equilibrium in it. Producers are not profit maximizers, but have quantitity oriented incentive functions. Taxes are part of the planning process without which there would not be an equilibrium for a given central plan. We prove the existence of a consumer market equilibrium and illustrate the model with numerical examples based upon a fixed point algorithm. The algorithm allows us to compare welfare and efficiency resulting from different plans.
Keywords: Planned economy, Soviet, Equilibrium
JEL Classification: C68, P21
Suggested Citation: Suggested Citation
Feltenstein, Andrew, Market Equilibrium in a Model of a Planned Economy of the Soviet Type: A Proof of Existence and the Results of Numerical Simulations. Review of Economic Studies, Vol. 46, No. 4, pp. 631-652, October 1979, Available at SSRN: https://ssrn.com/abstract=928528
Feedback
Feedback to SSRN
If you need immediate assistance, call 877-SSRNHelp (877 777 6435) in the United States, or +1 212 448 2500 outside of the United States, 8:30AM to 6:00PM U.S. Eastern, Monday - Friday.