Economics Command Economy Questions Medium
In a command economy, the role of savings is typically limited or non-existent. This is because in a command economy, the government or central planning authority controls and directs the allocation of resources, production, and distribution of goods and services.
In such an economic system, individuals and households do not have the freedom to make independent decisions regarding their savings or investments. The government determines the savings rate and directs the allocation of savings towards specific sectors or projects according to its economic goals and priorities.
The government may encourage savings to finance large-scale infrastructure projects, industrial development, or social welfare programs. However, the government usually controls and manages these savings through state-owned banks or financial institutions.
Overall, the role of savings in a command economy is primarily determined and directed by the government, with the aim of achieving its economic objectives and priorities.