Decentralized Management and Optimization of Development

Abstract

The present paper deals with a normative model of long term development of a centrally planned economy. The productive subsystem of the economy consists of n sectors S_i, i = 1,2,…,n,shown in Fig. 1. Each sector produces X_ii goods per year and purchases X_ji, j=1,…,n goods from sectors S_j in such a way that the net profit

$${{D}_{i}} = {{Y}_{{ii}}} - \sum\limits_{{\begin{array}{*{20}{c}} {j = 1} \\ {j \ne i} \\ \end{array} }}^{n} {{{Y}_{{ji}}},{{Y}_{{ii}}}} = {{p}_{i}}{{X}_{{ii}}},{{Y}_{{ji}}} = {{p}_{j}}{{X}_{{ji}}}$$

((1))

where p_i price attached to the commodity X_ii,i=1,…,n, is maximum.