craig.adams's blog

Mathematics of Economic Calculation

Here is a mathematical paper on the calculation problem. First though a little preamble on this. Calculation applies to both centralised and decentralised economies. In a decentralised economy the calculations are performed dynamically and inherently by the actions of the consumers themselves. In a centralised economy the calculations must be performed by central planners. Mises and Hayek hypothesised that the latter is impossible. Just to clarify that point, calculation was only thought to be unsolvable for a centrally planned economy.

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