A theory of shortage in socialist economies based on the “soft budget constraint”.
Given the costs of resource misallocation when prices are set too low, economists have wondered why governments do not raise prices to eliminate shortages altogether. A mathematical model suggests that the “soft budget constraint” common to state-owned firms in socialist economies is the reason tha...
| Published in: | American Economic Review Vol. 84; pp. 145 - 157 |
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| Format: | Article |
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American Economic Association
March 1994
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| Online Access: | View this record in EBSCOhost |
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