Towards Strategic Paths in Economic Planning

Abstract

This paper is about the development of a large-scale multisectoral dynamic model of the British economy and its potential use for economic planning.¹ Such a model is intended as a tool for managing the economy to achieve goals of both a short-term and a medium-term nature. This is economic planning in its broadest sense, involving taxation policy, the planning of government expenditures, monetary policy, the operating rules for nationalised industries and direct controls over resources. A model is useful at several points in the planning process: at the start, it can be used to explore alternative goals and the alternative paths towards them; when the choice is narrowed, the model provides the detailed implications of a particular strategy as regards industrial output, employment and investment for example; and as the plan is carried into action, the model can be used in the monitoring process in order to take into account changes in relationships and exogenous variables and to revise tire plan for these changes.