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Interenterprise Arrears in Transforming Economies: The Case of Romania

Author

Listed:
  • Eric V. Clifton

    (International Monetary Fund)

  • Mohsin S. Khan

    (International Monetary Fund)

Abstract

This paper reviews Romania's experience with interenterprise arrears during 1991 with the purpose of extracting lessons that might prove useful for other economies in transition to market-based systems. The rapid growth of interenterprise arrears poses a serious policy problem in many of the transforming economies of Eastern Europe, as well as in the republics of the former Soviet Union. Among the more striking cases is that of Romania, where gross interenterprise arrears grew almost 18-fold (to about 50 percent of GDP) in only one year. This paper discusses the development of these arrears and the policies implemented by the authorities to try to resolve the problem.

Suggested Citation

  • Eric V. Clifton & Mohsin S. Khan, 1993. "Interenterprise Arrears in Transforming Economies: The Case of Romania," IMF Staff Papers, Palgrave Macmillan, vol. 40(3), pages 680-696, September.
    • Handle: RePEc:pal:imfstp:v:40:y:1993:i:3:p:680-696
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    Cited by:

    1. Koen Schoors & Konstantin Sonin, 2005. "Passive Creditors," International Finance, Wiley Blackwell, vol. 8(1), pages 57-86, March.
    2. Akhmed Akhmedov & Ekaterina Zhuravskaya, 2004. "Opportunistic Political Cycles: Test in a Young Democracy Setting," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(4), pages 1301-1338.
    3. J Rostowski, 1993. "The Inter-Enterprise Debt Explosion in the Former Soviet Union: Causes, Consequences, Cures," CEP Discussion Papers dp0142, Centre for Economic Performance, LSE.
    4. Daniel Daianu & Lucian-Liviu Albu, "undated". "Strain and the Inflation - Unemployment Relationship: A Conceptual and Empirical Investigation," Ace Project Memoranda 96/15, Department of Economics, University of Leicester.
    5. Milan Nikolic & Jacek Rostowski, 1995. "Exit in the Framework of Macro-economic Shocks and Policy Responses during Transition: a Cross-country Comparison," CASE Network Studies and Analyses 0056, CASE-Center for Social and Economic Research.
    6. Hildebrandt, Antje, 2002. "Too many to fail? : Inter-enterprise arrears in transition economies," BOFIT Discussion Papers 11/2002, Bank of Finland, Institute for Economies in Transition.
    7. Perotti, E. C., 1998. "Inertial credit and opportunistic arrears in transition," European Economic Review, Elsevier, vol. 42(9), pages 1703-1725, November.
    8. Klaus Schröder, 1995. "Banking reforms in East Central Europe," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 30(4), pages 193-199, July.
    9. Dobrescu, Emilian, 1998. "Macromodels of the Romanian transition economy, Second edition," MPRA Paper 35825, University Library of Munich, Germany.
    10. repec:zbw:bofitp:2002_011 is not listed on IDEAS
    11. Nikitin, Maxim, 2000. "An Arrears Crisis and Stabilization Failure in a Transition Economy," Journal of Comparative Economics, Elsevier, vol. 28(4), pages 665-699, December.
    12. Emil-Maria Claassen, 1993. "Cleaning the balance sheets of commercial banks in Eastern Europe and their role in corporate governance," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 129(3), pages 600-609, September.
    13. Dobrescu, Emilian, 1996. "Macromodels of the Romanian transition Economy," MPRA Paper 35810, University Library of Munich, Germany.
    14. Hildebrandt, Antje, 2002. "Too many to fail? Inter-enterprise arrears in transition economies," BOFIT Discussion Papers 11/2002, Bank of Finland Institute for Emerging Economies (BOFIT).
    15. Michael Bruno, 1993. "Stabilization and the macroeconomics of transition ‐ How different is Eastern Europe?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 1(1), pages 5-19, January.
    16. Varshavsky Alexander, 1999. "Macroeconomic Aggregate Model for Analysis of Inflation and Stabilization of the Russian Economy," EERC Working Paper Series 97-109e, EERC Research Network, Russia and CIS.
    17. Norbert Holcblat, 1992. "La transition vers le capitalisme en Europe centrale et orientale. Transformations structurelles et intégration au marché mondial," Économie et Statistique, Programme National Persée, vol. 260(1), pages 29-36.
    18. Rostowski, J., 1993. "The inter-enterprise debt explosion in the former Soviet Union: causes, consequences, cures," LSE Research Online Documents on Economics 20968, London School of Economics and Political Science, LSE Library.
    19. Antje Hildebrandt, 2002. "Too many to fail? Inter-enterprise arrears in transition economies," Development and Comp Systems 0212001, University Library of Munich, Germany.
    20. Luoana D. Santarossa, 2001. "Arrears as a Sign of Financial Repression in Transition Economies - The Case of Romania," CERT Discussion Papers 0104, Centre for Economic Reform and Transformation, Heriot Watt University.

    More about this item

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes

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