Disorganization and financial collapse

Dalia Marin and Monika Schnitzer ()

Munich Reprints in Economics from University of Munich, Department of Economics

Abstract: Since the fall of communism, the former Soviet Union experienced a strong output decline and a dramatic increase in arrears and barter. We develop a model which explains how these three phenomena are connected. We introduce liquidity and credit constraints into a model of disorganization and show how these problems can alleviate the hold-up problem. We argue further that barter creates a hostage that allows to deal with disorganization when credit enforcement becomes prohibitively costly. Based on a firm survey in Ukraine in 1997, we test how input shortages, financial shortages and barter affect output growth of firms.

Date: 2005
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Published in European Economic Review 2 49(2005): pp. 387-408

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Related works:
Chapter: Disorganization and Financial Collapse (2007)
Journal Article: Disorganization and financial collapse (2005)
Working Paper: Disorganization and Financial Collapse (2000)
Working Paper: Disorganization and Financial Collapse (1999)
Working Paper: Disorganization and Financial Collapse (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:lmu:muenar:19258

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