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Article: economic planning
- Article from:
- The Columbia Encyclopedia, Sixth Edition
CopyrightThe Columbia Encyclopedia, Sixth Edition. Copyright 2008 Columbia University Press. (Hide copyright information)
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economic planning control and direction of economic activity by a central public authority. In its modern usage, economic planning tends to be pitted against the
laissez-faire
philosophy which developed in the 18th cent. Proponents of laissez faire believed that an economy works best when there is little government interference. The contemporary economic model of rational expectations offers perhaps the strongest critique of economic planning in its assertion that economic forecasting, both by individuals and competing businesses, is generally rational. In this model, government control of economic policy can only lead to complication, since any change instituted by central authorities ...