Details

Autor(en) / Beteiligte

• Vahabi, Mehrdad

Titel

SOFT BUDGET CONSTRAINT RECONSIDERED

Ist Teil von

• Bulletin of economic research, 2014-01, Vol.66 (1), p.1-19

Ort / Verlag

Oxford: Blackwell Publishing Ltd

Erscheinungsjahr

2014

Quelle

EBSCOhost Business Source Ultimate

Beschreibungen/Notizen

• ABSTRACT This paper demonstrates that Kornai's original concept of the soft budget constraint (SBC) as a theoretical innovation in micro‐theory disguises income redistributions that are essentially macroeconomic relationships. The SBC also postulates a competitive market economy as the benchmark of hard budget constraint (HBC) and efficiency. A recent formal theory explains the SBC as a component of profit‐maximizing strategic behaviour. From this perspective, the SBC can be integrated into the new microeconomics, but it loses its specific institutional connotation and its macroeconomic dimension. The SBC is thus included in ubiquitous market‐type relationships, particularly complete (optimal) contractual arrangements.