Material Balances Principle

Discipline: Economics

Developed in the early planning programs of the Soviet Union, material balances principle attempts to balance supply and demand for a given commodity.

If an imbalance occurs, the planning process may require imports of additional raw materials or reductions in the amount of material used by other parts of the economy or organization.

Source:
J M Montias, 'Planning with Material Balances in Soviet-type Economies', American Economic Review, vol. XLIX (December, 1959), 963-85

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