Centralized economy

A centralized economy, also known as a planned economy, is one where a central authority—usually the government—makes all major economic decisions. This includes what goods and services are produced, how much is made, and how resources are allocated. The goal is to ensure equal distribution and prevent market fluctuations. Unlike market economies where supply and demand determine outcomes, a centralized system relies on government planning to control economic activity. Examples include historical socialist or communist states. The approach aims for stability and equality but can sometimes lead to inefficiency and lack of innovation.