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Problems with Central Planning

  The coordination problem becomes
  more difficult as the economy grows.
• Because the outputs of many industries serve as inputs to
  other industries, the failure of any single industry to achieve
  its output target causes a chain reaction of repercussions.
• Which means the second industry cant do anything until the
  first industry is done making the output, because they need
  what the first industry has.
• Planning techniques that had worked for the simpler economy
  proved inadequate and inefficient as the economies grew.
• Russia was the worlds 15th largest car
  producer in 2010, and accounts for about 7%
  of the worldwide production. In 2009 the
  industry produced 595,807 light
  vehicles, down from 1,469,898 in 2008 due to
  the global financial crisis.

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Carline.3rd.group1.

  • 1. Problems with Central Planning The coordination problem becomes more difficult as the economy grows.
  • 2. • Because the outputs of many industries serve as inputs to other industries, the failure of any single industry to achieve its output target causes a chain reaction of repercussions. • Which means the second industry cant do anything until the first industry is done making the output, because they need what the first industry has. • Planning techniques that had worked for the simpler economy proved inadequate and inefficient as the economies grew.
  • 3. • Russia was the worlds 15th largest car producer in 2010, and accounts for about 7% of the worldwide production. In 2009 the industry produced 595,807 light vehicles, down from 1,469,898 in 2008 due to the global financial crisis.