The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Indicative Planning

  • Klaus Nielsen
Reference work entry


Indicative planning aims to coordinate private and public investment and output plans through forecasts or targets. Compliance is voluntary. The underlying logic is that the plan can supply economically valuable information which, as a public good, the market mechanism cannot disseminate efficiently. It may be perceived as a substitute for non-existing forward markets. However, indicative planning takes into account only endogenous market uncertainty, not exogenous uncertainty (technology, foreign trade and so on). Indicative planning has been most consistently and continuously implemented in France and Japan but has been used in many other countries, although decreasingly so since the 1970s.


Austrian economics Bounded rationality Forecasting Forward markets General equilibrium Imperfect information Indicative planning Planning Rational expectations Uncertainty 

JEL Classifications

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  1. Belassa, B. 1990. Indicative planning in developing countries, Policy research working paper no. 439. Washington, DC: World Bank.Google Scholar
  2. Holmes, P. 1987. Indicative planning. In The new Palgrave dictionary of economics, ed. J. Eatwell, M. Milgate, and P. Newman, vol. 2. London: Macmillan.Google Scholar
  3. Meade, J.E. 1971. The theory of indicative planning. Manchester: Manchester University Press.Google Scholar

Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Klaus Nielsen
    • 1
  1. 1.