Econometrica: Jan 1970, Volume 38, Issue 1

Iterative Multilevel Planning with Production Targets

https://doi.org/0012-9682(197001)38:1<50:IMPWPT>2.0.CO;2-T
p. 50-65

Martin Weitzman

Drawing up a medium term economic plan usually involves a complicated interaction between the planning ministry and representatives of the various industries, firms, or departments. Each economic agent works in his own environment with at best incomplete information about the other agents. Yet somehow the economic system as a whole is typically able to move toward an operational plan which is satisfactory even when judged by the criterion of complete information. This paper examines the properties of one particular theoretical model of economic planning in which the center transmits information via a system of quotas.

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