Kornai János: Two-Level Planning. Mimeographed. Co-author: Tamás Lipták. Budapest: MTA Számítástechnikai Központ, 1963. Original: in Hungarian, 1962. In Polish: 1963, in German: 1964.
INTRODUCTION1 2 In recent years work has begun In Hungary on the application of mathematical methods to the higher levels of planning. Experiments are proceeding in two directions. One of these has been the use of mathematical programming in several sectors of industry, to form a basis for their plans. The calculations - some of which have been concluded, while others are near completion - use economic optimum criteria to determine the most favourable program for the economic activities /production, producers* utilization, exports, imports, investments, etc./, of the whole of the particular sector 2 of industry. The other direction has been the use of input-output tables /static Leontief models/ in national planning.1 The National Planning Bureau now makes regular use of the input-output matrix of the economy to check the inner coordination of the annual and five-year plans. This is the first mathematical tool to have been used in Hungary for the preparation of macroeconomic plans. It is, however, as is generally known, not suitable for optimization and 1 The authors first published the method treated in this paper in duplicated form under the aegis of the Computing Centre of the Hungarian Academy of Sciences in May, 1962 [13] , and with the addition of a revised version of the mathematical part, in October, 1962 [17] . An earlier version of this paper in Hungarian is under press in the Publications of the Mathematical Institute of the Hungarian Academy of Sciences [14] . A paper by Lipták [18] discusses a further developed version of the "general model" treated here. 2 See [12J . 1 Detailed information on the use of input-output tables in Hungary is presented in the material of the scientific conference held in Budapest in 1961, see [6] .