Study week on the econometric approach to development planning

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Monograph

Identifikator:: 1824422792

URN:: urn:nbn:de:zbw-retromon-217476

Document type:: Monograph

Title:: Study week on the econometric approach to development planning

Place of publication:: Amsterdam [u.a.]

Publisher:: North-Holland Publ. Co. [u.a.]

Year of publication:: 1965

Scope:: XLVII, 1259 S.; graph. Darst.

Digitisation:: 2022

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: The analysis of economic systems / Richard Stone, Cambridge University - Cambridge - Great Britain

Collection:: Economics Books

PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA can be ‘given’ in all its details by a central authority; an obvious example of this is the composition of consumers’ expen- diture. Another reason is that objectives are multiple and conflicting: many of them can be satisfied in several ways which have substantial, differential effects on others. Finally, it is impossible to state the objectives that make up a policy without knowing a great deal about feasibility and cost. In each case the necessary knowledge can only come from the kind of analysis that a model is designed to provide. An important question at this stage is the range of problems that the politician would like to see integrated. For example, if the model is a national model with no regional dimension, it can say nothing about locative problems. If there is to be a regional aspect to economic policy, then the model must be capable of providing solutions for the different regions. A re- gional dimension to an economic model is useful because it makes people think why they want particular things to take place in particular localities and enables them to compare the costs of the alternatives. Thus we see that the politician needs the help of the model- builder in formulating a policy, just as the model-builder needs the help of many other people in building his model. We also see that the objectives from which the policy will be shaped get into a model in various ways. An objective may be built into the model. This is the case where it is agreed that private consumers should be left to decide how they spend their money. In effect the policy maker says to the model-builder: I shall tell you how much money to assume available for private spending; your job is to find out how this spending will be allocated given the shadow prices that emerge from your model, and what indirect demands it will place on the system. In the course of drawing up the policy, alternative calculations are sure to be needed, but the maximisation of the average consumer’s utility forms an integral part of the model. Or, an objective may form a constraint on acceptable solu- [1] Stone - pag. 20

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