01704cas a2200241 a 4500 AALejournalIMF002504 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451845617 1018-5941 BD-DhAAL BD-DhAAL Osband, Kent. Economic Crisis in a Shortage Economy / Kent Osband. Washington, D.C. : International Monetary Fund, 1991. 1 online resource (26 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students It is not unusual for reforming socialist economies to relax wage controls without hardening budget constraints on enterprises or freeing consumer goods prices. This policy can be dangerously destabilizing. While higher wages permit workers to purchase more of some goods, they also tend to exacerbate shortages and to breed waste and corruption. Beyond a certain level, economy-wide wage hikes will worsen worker welfare. This is true regardless of whether deficit goods are strictly rationed, are sold randomly at official prices to queuing workers, or are offered to workers by 'insiders' only at black market prices. However, the form of allocation does influence output and worker welfare. Mode of access: Internet IMF Working Papers; Working Paper ; No. 1991/038 Full text available on IMF http://elibrary.imf.org/view/journals/001/1991/038/001.1991.issue-038-en.xml IMF e-Library