Back Matter
  • 1, International Monetary Fund


  • Aleksashenko, S., Tight Financial Politics in Russia: the First Experiment and its First Results,” (translation from Russian), Boprosi Ekonomikil, (December 1992).

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  • Berliner, Joseph S., The Innovation Decision in Soviet Industry, (1976).

  • Bigman, David, and Sergio Pereira Leite, Enterprise Arrears in Russia: Causes and Policy Options,” (Washington), International Monetary Fund, Working Paper No. WP/93/61, (August 1993).

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  • Brechling, F.P.R., and R.G. Lipsey, Trade Credit and Monetary Policy,” Economic Journal, (December 1963).

  • Calvo, A. Guillermo and Fabrizio Coricelli, Credit Market Imperfections and Output Response in PCPR,” (mimeo), (1993), Vol.1.

  • Calvo, A. Guillermo and Fabrizio Coricelli, Output Collapse in Eastern Europe; the Role of Credit,” (Washington), International Monetary Fund, Staff Papers, Vol. 40, (March 1993).

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  • Calvo, A. and Jacob A. Frenkel, From Centrally Planned Economy to Market Economy,” (Washington), International Monetary Fund, Staff Papers, (June 1991).

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  • Central Bank of Russia, Tekushchie Tendintsii v Denzhno-Kreditnov Sfere, (Current Tendencies in the Monetary-Credit Sphere), No.1, (1994).

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  • Clifton, V. Eric, and Mohsin S. Khan, Interenterprise Arrears in Romania,” (Washington), International Monetary Fund, Staff Papers, Vol. 40, (September 1993).

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  • Ferris, J. Stephen, A Transaction Theory of Trade Credit Use,” Quarterly Journal of Economics, (May 1981).

  • Ickes, Barry W., and Randi Ryterman, Roadblock to Economic Reform: Interenterprise Debt and the Transition to Markets,” (mimeo), (1993).

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  • Ickes, Barry W., and Randi Ryterman, The Interenterprise Arrears Crisis in Russia,” Post-Soviet Affairs, (1992).

  • IMF, WB, OECD and EBRD, A Study of the Soviet Economy, (1991).

  • IMF, Economic Reviews: Russian Federation, (1993).

  • Laffer, Arthur B., Trade Credit and the Money Market,” Journal of Political Economy, (March 1970).

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Statistical References

  • Bank of Korea, Economic Statistics Yearbook, (1993).

  • Bank of Korea, Financial Statements Analysis, (Various Issues).

  • Board of Governors of the Federal Reserve System, Flow of Funds Accounts, (Various Issues).

  • Goskomstat of the Russian Federation, Finance in the Russian Federation, (1991).

  • Goskomstat of the Russian Federation, National Economy of the Russian Federation in 1992, (1992).

  • Goskomstat of the Russian Federation, Statistical Bulletin; Selected Economic Indicators of the Russian Federation for 1992, (1993).

  • Goskomstat of the Russian Federation, Social-Economic Situation of Russia, (Various Issues).

  • U.S. Department of Commerce, Business Statistics, (1992).

  • U.S. Department of Commerce, Quarterly Financial Report for Manufacturing, Mining and Trade Corporations, (Various Issues).


We are grateful to Messrs. John Anderson, Daniel Citrin, Donal Donovan, Richard Hass, Ernesto Hernández-Cáta, Keon Hyok Lee, Michael Marrese, Donald Mathieson, and Jeronimo Zettelmeyer for helpful discussions and comments on an earlier version of this paper.


See, for example, Bigman and Leite (1993), who propose reasons for IEA accumulation and discuss schemes to reduce IEA.


The model does not exclude the possibility that the cost of borrowing money (rt+1) is less than the cost of receiving trade credit (p(γi-1)) and in that case, the solutions will be opposite. However, we would not consider this case sustainable since in such case all banks will be out of business. Alternatively, we may assume that productivity of the economy is high enough to guarantee positive real interest rates. See equation (13) for determinants of real interest rates.


This is not a restrictive assumption. The introduction of the infinitely-living agents does not change the main result of this paper.


See IMF Economic Reviews, Russian Federation, 1993, pp.30-31, for detailed information on the results of the mutual setting.


Presidential decree No. 1662 of October 19, 1993 “On improvements in settlements in the national economy and their timely executions to increase accountability.”


Presidential decree No. 1005 of May 23, 1994 “On additional measures to normalize settlements and strengthen the payment discipline in the national economy.” In a move to implement the decree, the Central Bank of Russia (CBR) established an interim procedure how legal entities might use funds in their settlements and current accounts (CBR letter of June 30, 1994, No. 98). Also, the State Tax Inspection, the Ministry of Finance, the CBR and the Ministry of Justice issued a resolution to support the decree (Government Resolution No.682 of September 8, 1994).


Presidential Decree No. 1006 of May 23, 1994.


Government Decree No. 498 of May 20, 1994.


Kommersant Weekly, October 18, 1994, p.22.


A CBR publication suggests that arrear statistics prior to June 1992 are not directly comparable to those statistics afterwards; until June 1992, when balances in settlement accounts of debtor enterprises were not large enough to cover arrived payment orders, the differences were automatically transferred to the File No.2 whereas afterwards, the arrears criteria were basically set up by contracts between creditors and debtors (Tekushchie Tendintsii v Denzhno-Kreditnoy Sfere (Current Tendencies in the Monetary-Credit Sphere), No 1, CBR, January 1993).


For example, the number of large firms that decided to commercialize increased from 429 to 1,952 in the first quarter of 1993 alone. During the same period, the number of large firms that completed commercialization increased from 80 to 367 (source: GKI).


On average, 48% of products produced by Russian heavy industrial enterprises are products of enterprises in other industrial sectors (source: authors’ estimates based on GKI data).


Source: Business Statistics and Flow of Funds for U.S; Finance in the Russian Federation for Russia; Financial Statements Analysis for other countries, A sharp decline of the Korean ratio in 1972 reflects major regulatory changes on curb markets in that year.


Rabochaya Tribune, September 10, 1994.


Rabochaya Tribuna, September 16, 1994.


Both the CBR refinance rate and the interbank reference rate were negative in real terms during most of 1993, but then turned sharply positive toward the end of year and into 1994.


Government Resolution No.1024, September 9, 1994.


Russian Federation, Report on National Account Statistics Mission, June 1994.


The sum of the net arrears was Rub 402 billion whereas the sum of total arrears position of enterprises was Rub 2,300 billion as of July 1, 1992 (Economic Reviews. Russian Federation, 1993).


Ekonomika i Zhizn, p.11, No.21, May 1994.


A recent government decree (No.498, May 20, 1994) stipulates arrears position of enterprises as one of bankruptcy criteria.

A General Equilibrium Approach to Interenterprise Arrears in Transition Economies with Application to Russia
Author: Goohoon Kwon and Mr. Se-Jik Kim