ADAPTABILITY OF NONLINEAR EQUILIBRIUM MODELS TO CENTRAL PLANNING

Linear multisectoral models have for long been applied in the Hungarian national economic planning. Price-quantity correspondences and interaction, however, cannot easily be taken into account in the traditional linear framework. Computable general equilibrium modelers in the West have developed techniques which use extensively price-quantity interdependences. However, since they are usually presented with the controversial strict neoclassical interpretation, the possibility of their adaptation to socialist planning models has been concealed. This paper reflects on some results of a research investigating the possible adaptation of equilibrium modeling techniques to central planning models.