Planned economy Definition
In a planned economy economic decisions are made on behalf of the public by planners who determine what sorts of goods and services to produce and how they are to be allocated. Since most known planned economies rely on plans implemented by the way of command, they have become widely known as command economies. To stress the centralized character of planned economies and to contrast the term with the economic planning required in any rational economy, a more specific term, centrally planned economy, is also used.
Although a planned economy may include exchanges of money, these exchanges are less important in allocating resources than the central plan. Planned, or command economy models are usually contrasted with the concept of market economy. A palace economy may be considered as a subsistence economy augmented with elements of command economy.