Planning of Prices

Planning of Prices

 

the substantiation and determination of the level and structure of prices for a forthcoming period. Price planning is very important for national economic planning, for carrying out a uniform price policy, and for organizing in conformity with a plan all efforts related to preparing and introducing new price lists.

In the USSR the foundation for the planning of prices was laid in the late 1920’s. The first five-year plan (1929–32) included targets for changes in the level and structure of prices. The five-year plan for adjusting wholesale prices—the basis of price planning—includes an outline of the main trends in the development of prices for the five-year period, targets for the improvement of methodology and methods of price formation, and dates for general reviews of prices. The targets set in the five-year plan are attained through the system of current planning of prices, which is based on annual plans developed by government bodies specializing in price formation.

Forecasting prices, an important stage in the planning of prices, provides essential information on the future level and structure of prices for sectors and for basic types (groups) of output. This information is used in substantiating the plan, in forecasting the development of the national economy and optimal proportions and structure for production, in determining rational locations for production, and in the selection of variants of planning decisions.

The intersector balance, multiproduct models, and statistical methods are used to calculate the variants of future price changes, taking into account their mutual effects. Current, medium-term, and long-term planning of prices have developed in several other socialist countries, where planning of prices rests on the same basic principles as in the USSR but takes into account specific national characteristics.

G. N. CHUBAKOV

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