Soft budget constraints, transition and financial systems
Article Abstract:
The problem of how to refinance enterprises making losses appears in market economies and is also apparent in transition economies. A number of ways of dealing with soft budget constraints by hardening them are examined.
Publication Name: Journal of Institutional & Theoretical Economics
Subject: Economics
ISSN: 0932-4569
Year: 2000
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Soft budget constraints, transition, and industrial change: comment
Article Abstract:
Governments may refinance bad projects, and this can occur in all economies and is not a problem solely linked to transitional economies. There are preventive measures such as privatization, which are discussed in detail.
Publication Name: Journal of Institutional & Theoretical Economics
Subject: Economics
ISSN: 0932-4569
Year: 2000
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The design of reform packages under uncertainty
Article Abstract:
A model of large-scale economic reforms that is patterned after the transition process in Easter Europe is developed. This model incorporates collective and individual uncertainty regarding the outcome of reforms, and assumes that the government favors speed and sequencing of reforms. A comparison of big-bang strategies with gradualist reform programs shows that the latter are easier to initiate than the former. It is also found that optimal sequencing of reforms should generate constituencies for more reforms. Lastly, it is revealed that, given the lower option value of waiting, gradualism may lead to a greater investment reaction.
Publication Name: American Economic Review
Subject: Economics
ISSN: 0002-8282
Year: 1995
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