Centrally Planned Economy


Centrally Planned Economy
An economic system in which economic decisions are made by the state or government rather than by the interaction between consumers and businesses. Unlike a market economy in which production decisions are made by private citizens and business owners, a centrally planned economy seeks to control what is produced and how resources are distributed and used. The production of goods and services is undertaken by state-owned enterprises.

Centrally planned economies assume that the market does not work in the best interest of the people, and that in order for social and national objectives to be met a central authority needs to make decisions. The state can set prices for goods and determine how much is produced, and can focus labor and resources on industries and projects without having to wait for private investment capital.

Most modern economies are a mixture of centrally planned economies and market economies, with governments controlling some aspects of the economy and the private sector controlling others.


Investment dictionary. . 2012.

Look at other dictionaries:

  • centrally planned economy —   see command economy …   Geography glossary

  • centrally planned economy — noun an economic system which is controlled by a government, economic decisions being made by government planners and wealth distributed under government control …   Australian English dictionary

  • Planned economy — This article is about an economic system controlled or directed by the state. For proposed economic systems that employs participatory or democratic planning, see Decentrally planned economy. Part of a series on Economic systems …   Wikipedia

  • planned economy — noun an economy in which production, investment, prices, and incomes are determined centrally by the government …   English new terms dictionary

  • Economy of North Korea — Economic centre of North Korea Currency North Korean won Fiscal year …   Wikipedia

  • Economy of Cuba — Flag Rank 89th Currency Cuban peso (CUP) = 100 centavos and Cuban Convertible Peso (CUC) = 24 CUP …   Wikipedia

  • Economy of East Germany — Like other East European communist states, the German Democratic Republic (GDR East Germany) had a centrally planned economy (CPE) similar to the one in the former Soviet Union, in contrast to the market economies or mixed economies of most… …   Wikipedia

  • Economy of Russia — Russia is a unique emerging market, in the sense that being the nucleus of a former superpower shows more anomalies. On one hand, its exports are primarily resource based, and on the other, it has a pool of technical talent in aerospace, nuclear… …   Wikipedia

  • Economy of Armenia — Armenia is the second most densely populated of the former Soviet republics. It is situated between the Black Sea and the Caspian Sea, bordered on the north and east by Georgia and Azerbaijan and on the south and west by Iran and Turkey.Until… …   Wikipedia

  • Economy —    With the exception of a brief period of entrepreneurial experimentation under Vladimir Lenin’s “New Economic Policy” (NEP) from 1921 to 1928, the Soviet economy was historically dominated by the state. Joseph Stalin’s centrally planned… …   Historical Dictionary of the Russian Federation


Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.