Kornai János: “Application of an Aggregate Programming Model in Five Year Planning“, co-author: Zsuzsa Ujlaki. Acta Oeconomica, 1967, Vol. 2, No. 4, pp. 327-344. Original: 5.37, in Hungarian, 1967.
J. Kornai—Mbs. L. Újlaki APPLICATION OF AN AGGREGATE PROGRAMMING MODEL IN FIVE-YEAR PLANNING The article expounds a linear programming model by means of which calculations have been worked out in order to establish the 1970 plan targets. The model, broken down to 18 sectors, surveys the national economy in a very aggregated form. The aim was to produce a great number of plan variants, each of them embodying a real plan concept differing from one another though, from the aspect of general politico-economic aims and some fundamental foreign trade suppositions. The purpose of the series of calculations was to compare and analyse the different variants and to hit upon the sensitive and relatively stable points of the programmes. In Hungary, as in most socialist countries, the two methods of constructing planning models — i.e. input-output analysis and mathematical programming — have developed in recent years more or less independently of one another. The idea of joining the two methods has repeatedly been put forward in the literature on the subject. In Hungary, too, some efforts were made to this end.* The present article gives an account of an experiment of this type, the construction of a relatively aggregate economy-wide programming model based on some 80 equations, the data material of which had been taken over from the input-output table of the National Planning Office. The relationship between the model in question and that of “two-level planning”, with its detailed and highly disaggregate mathematical programming, will be dealt with at the end of this article. This will be preceded by the description of the aggregate model itself and the analysis of some experiences gained in the course of the calculations. It is beyond the scope of this article to analyse the inferences that may be drawn from our calculations for economic policy and practical planning. The main purpose is to expound the economic and planning-methodological conclusions which lend themselves to generalization.** * See e.g. [1], ** The numerical results of the research work and the conclusions to be derived from it for economic polioy are presented in detail in a paper prepared by the authois [2].