Centrally Planned Economy

2019 Words9 Pages
The world’s economies consist of three main economy systems with different economic mechanisms. There are centrally planned economy, mixed economy and unplanned economy. Centrally planned economy is one kind of planned economy, it is also known as command economy or socialism. The process of implementation of centrally planned economy is called planification. The phrase is originally generated from “Befehlswirtschaft” in German which used to represent Nazi economy (Amadeo, 2012). Incan empire in 16th century Peru, the Mormons in 19th century Utah had already proven with the existence of command economy. However, many believe that the idea of command economy is derived from the work of Karl Marx. The goals of command economy are to boost…show more content…
Moreover, the growth rate of a nation’s productivity determines the growth rate of is average income. In countries which their nations can produce huge amount of goods and services per unit of a time, the people is most likely enjoy a high standard of living. Besides, China have gained maximum advantage from private entrepreneurship. So, it is undoubtedly important for china to shift the share of financial assets and land holdings from government to public sector (L. Assar, 2007). Thus, the productivity of china dramatically improved, similarly to the economic development. The estimated results showed that the pattern of China’s productivity growth have obviously shifted in the year 2000s compare to 1990s (Journal of Daily Science, 2012). A country’s standard of living depends on its ability to produce goods and services which means the more goods and services are produced, the higher standard of living (L. Assar, 2007). Besides, total factor productivity was decomposed into technical efficiency and technical development changes on China manufacturing industries (Journal of Daily Science, 2012). With open market and liberalization of economy, technology of production and skills of labors have increased due to the technology and labors exchange program with advanced countries. Workers show their enthusiast in learning new skills or brush up their skills after economy reform. Technology
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