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205 and 318, and SG 57, p. 329). Of course, caution is necessary because inter alia prices on which these rates of return are calculated were themselves distorted. It seemed impossible for these industries to compete with one another for new investment unless the authorities were prepared to abandon their drive to build heavy industry first. e. to pay less for capital. Matters were complicated by the irresponsibility of enterprises which sought credit regardless of cost. 5 per cent for fear that it would otherwise have been pushed up to 30 or 40 per cent.

Despite the fear of monopolies (see p. 22), and pressure that they should be profitable, enterprises were also required to cooperate with each other. It was amended twice and then replaced in 1958 by the Act on Associations in the Economy which was amended in 1959. Fundamentally, a network of chambers of industry, commerce, transport, artisan production and so forth, was introduced at various levels- district, republican, federal- to fulfil functions very similar to those of corresponding organisations in private enterprise countries.

164). 53) which was biased towards heavy industry providing few jobs. The first two problems the communists tried to deal with were food shortages and excessive employment in industry, but they thought they The Role of Planning and 'Automatism' 15 could do it within the existing system and even again stressed the need for concentration on key heavy industry projects. Radical changes of the economic system were perhaps not even intended when, on 26 June 1950, President Tito (K 50) laid before parliament legislation on workers' councils and decentralisation of the economy.

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Advanced Macroeconomics Solutions by Romer


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