Interenterprise Arrears in Post-Communist Economies

April 1, 1994

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

The reasons for the growth of interenterprise debt are analyzed. It is suggested that it results mainly from the appearance of normal trade credit in a liberalized economy, and when a monetary squeeze is part of a stabilization attempt that is not credible. In the latter case, the result can be a sharp fall in output. Non-market and market solutions to this problem are analyzed, and the advantages of the latter over the former are stressed.

Subject: Bank credit, Banking, Central banks, Credit, Currencies, Currency issuance, Monetary base, Money

Keywords: Bank credit, clearing of IED, Credit, Currencies, Currency issuance, downstream enterprise, enterprise assets, IED expansion, IED growth, IED market, IED problem, IED-price-IED bubble, M ratio, Monetary base, real value, upstream enterprise, velocity of circulation, WP

Pages:
42
Volume:
1994
DOI:
https://doi.org/10.5089/9781451975109.001
Issue:
043
Series:
Working Paper No. 1994/043
Stock No:
WPIEA0431994
ISBN:
9781451975109
ISSN:
1018-5941

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