{
  "title": "Inter-Enterprise Arrears in a Post-Command Economy: Thoughts From a Romanian Perspective",
  "publication": "IMF Working Papers, May 1, 1994",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/30/inter-enterprise-arrears-in-a-post-command-economy-thoughts-from-a-romanian-perspective-1264",
  "canonical": "https://www.imf.org/en/publications/wp/issues/2016/12/30/inter-enterprise-arrears-in-a-post-command-economy-thoughts-from-a-romanian-perspective-1264",
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  "summary": "The paper considers that strain is the main source of inter-enterprise arrears in post-command economies. Strain can be linked with the structure of the economy and the size of resource misallocation.",
  "sections": [
    {
      "heading": "Executive summary and core argument",
      "content": "- The paper considers that strain is the main source of inter-enterprise arrears in post-command economies.\n- Strain is linked with the structure of the economy and the size of resource misallocation.\n- Inter-enterprise arrears “soften” markets and operate as a self-protecting device against the pressure for change.\n- As temporary quasi-inside money, arrears fuel inflation.\n- The paper emphasizes a paradox of policy credibility in undertaking structural adjustment.\n- Rising exports can be a possible side effect of arrears and a constraining factor; the size of the economy is seen as affecting the relationship between arrears and exports.\n- Containing arrears is characterized as a process that will overlap in time with the evolving environment rather than a one-shot policy drive."
    },
    {
      "heading": "Findings and mechanisms",
      "content": "- Strain due to structural economic features and resource misallocation is identified as the primary driver of inter-enterprise arrears.\n- Arrears functionally:\n  - “Soften” markets, reducing immediate market pressures for change.\n  - Act as a self-protecting device for enterprises embedded in a post-command structure.\n  - Operate as temporary quasi-inside money, contributing to inflationary pressures.\n- Policy credibility issues arise when attempting structural adjustment because measures to contain arrears interact with incentives and expectations across enterprises.\n- Relationship between arrears and exports:\n  - Rising exports may be a side effect of arrears.\n  - The size of the economy influences how arrears and exports interact, potentially constraining adjustment options."
    },
    {
      "heading": "Policy recommendations and operational framework",
      "content": "- An operational framework for containing arrears would include:\n  - “Breaking up” structure.\n  - Imposing a disciplining “straitjacket” on structure.\n  - Industrial policy, described as “picking losers among losers.”\n  - Targeted external assistance.\n- Emphasis that containing arrears cannot be a one-shot policy; it requires a sustained, phased process aligned with the evolving economic environment."
    },
    {
      "heading": "Subject areas and keywords (as listed in the source)",
      "content": "- Subjects: Arrears, Budget planning and preparation, Currencies, Exports, External debt, Financial services, Inflation, International trade, Prices, Public financial management (PFM), Real interest rates\n- Keywords: Arrears, Budget planning and preparation, Eastern Europe, enterprise behavior, enterprise reform, enterprises running, Exports, freedom enterprise, Inflation, Inter-enterprise arrears, market economy, nonviable enterprise, Real interest rates, structural adjustment, Western Europe, WP\n\n---\n\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/inter-enterprise-arrears-in-a-post-command-economy-thoughts-from-a-romanian-perspective-1264"
    }
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    "Authors: Daniel Daianu",
    "Published: May 1, 1994",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451847451.001",
    "The paper considers that strain is the main source of inter-enterprise arrears in post-command economies.",
    "Strain is linked with the structure of the economy and the size of resource misallocation.",
    "Inter-enterprise arrears “soften” markets and operate as a self-protecting device against the pressure for change.",
    "As temporary quasi-inside money, arrears fuel inflation.",
    "The paper emphasizes a paradox of policy credibility in undertaking structural adjustment.",
    "Rising exports can be a possible side effect of arrears and a constraining factor; the size of the economy is seen as affecting the relationship between arrears and exports.",
    "Containing arrears is characterized as a process that will overlap in time with the evolving environment rather than a one-shot policy drive.",
    "Strain due to structural economic features and resource misallocation is identified as the primary driver of inter-enterprise arrears.",
    "Arrears functionally:",
    "Policy credibility issues arise when attempting structural adjustment because measures to contain arrears interact with incentives and expectations across enterprises.",
    "Relationship between arrears and exports:",
    "An operational framework for containing arrears would include:",
    "Emphasis that containing arrears cannot be a one-shot policy; it requires a sustained, phased process aligned with the evolving economic environment.",
    "Subjects: Arrears, Budget planning and preparation, Currencies, Exports, External debt, Financial services, Inflation, International trade, Prices, Public financial management (PFM), Real interest rates",
    "Keywords: Arrears, Budget planning and preparation, Eastern Europe, enterprise behavior, enterprise reform, enterprises running, Exports, freedom enterprise, Inflation, Inter-enterprise arrears, market economy, nonviable enterprise, Real interest rates, structural adjustment, Western Europe, WP"
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