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Topic: Budget constraint

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In the News (Thu 20 Jun 19)

 [No title]
The "soft budget constraint syndrome" is usually associated with the paternalistic role of the state towards economic organizations and private firms, non-profit institutions and households.
The soft budget constraint syndrome is the manifestation of the paternalistic role of the modern state.
The softening of the budget constraint is an inducement to such incompatibility: the softer the budget constraint and the larger the sphere of the economy where the syndrome prevails, the more incompatibility appears.
faculty.vassar.edu /kennett/Kornai.htm   (4349 words)

 Budget Hotels in Austria | Budget Hotels Austria | Hotels Austria   (Site not responding. Last check: 2007-10-11)
You will find a budget hotels in Austria to be equipped with all essential facilities that satisfies you completely.
Constraint in your budget never acts as a hindrance in your enjoying the tour.
Budget hotels in Austria is a nice option if you ever wish to stay longer within your budget.
www.a1austriahotels.com /budget-hotel-in-austria.html   (206 words)

 Exam #1
The new budget constraint is the dark blue line that is horizontal from the vertical intercept of the old constraint, moving the distance of the value of the vacation ($25,000), and then the negatively sloped line below this point.
This is true for Ted, whose indifference curve is tangent to the constraint at pt T. This is not true for Bill, whose indifference curve intersects the constraint at pt B (at the kink point).
Because the budget constraint is also linear (with a slope of 1/4), Frak must consume at one of the end points on the budget constraint.
www.louisville.edu /~bmhawo01/econpage/301/oldexams/mt1/index.html   (1151 words)

 Finance & Development, June 1999 - Lessons of the Russian Crisis for Transition Economies
The soft budget constraint was normally the result of a state budget process far removed from considerations of efficiency or profit.
Second, because soft budget constraints are incompatible with an equitable and efficient tax system, the enterprise's tax obligation would be determined in practice not by tax law but by the terms of a contract negotiated between the enterprise and the state authorities.
The first was to demonstrate that it had the political will to tighten the budget by reforming its relationship with large enterprises, such as those in the oil and gas sectors, through the imposition of hard budget constraints.
www.imf.org /external/pubs/ft/fandd/1999/06/gaidar.htm   (2176 words)

 [No title]
The increase in the price of pizza shifts the budget constraint to BC2, and the consumer moves to point C where the new budget constraint is tangent to a lower indifference curve.
The consumer's budget constraint shifts from BC1 to BC2 and her optimal choice changes from point A (c1 cheese, w1 wine) to point B (c2 cheese, w2 wine).
To decompose this change into income and substitution effects, we draw in budget constraint BC3, which is parallel to BC2 but tangent to the consumer's initial indifference curve at point C. The movement from point A to C represents the substitution effect.
www.econ.umn.edu /~fyang/Summer03_1101/Ch21.doc   (2964 words)

 bp_casefair_econf_7e|Household Behavior and Consumer Choice|Household Choice|Budget Constraint
The budget constraint is the maximum combination of goods that one could consume given a set of prices, income, and wealth.
All the points under (and including) the budget constraint are called the opportunity set or choice set.
The budget constraint is a specific graph that represents the ability of a consumer to purchase things.
wps.prenhall.com /bp_casefair_econf_7e/0,8233,2030717-,00.html   (494 words)

 Emilie Chang
According to the budget constraint line, Bobby is better off with the $300 dollar gift certificate.
This is the poor person’s budget constraint line after receiving the food stamps and before selling them on the fl market.
Connie’s budget constraint pivots on the x – axis from 100 pounds of potatoes to 50 pounds of potatoes.
www.core.binghamton.edu /~emsuechang/homework2.htm   (541 words)

 Budget constraint - Wikipedia, the free encyclopedia
A Budget Constraint represents the combinations of goods and services that a consumer can purchase given current prices and his income.
The budget constraint states that total spending cannot exceed his revenue:
The graphical representation of the budget constraint is the budget line which represents the maximum quantity of
en.wikipedia.org /wiki/Budget_constraint   (264 words)

 Soft Budget Constraint and Stock Price Information
The budget implemented at an interim date is always superior to the one efficient ex ante, since, at the interim stage, regulators do not internalize the disincentive effect of their intervention on firms effort.
Budget constraints are more or less soft according to the information available to regulators.
It is shown that stock-price information may increase the softness of the budget constraint, decrease firms incentives to exert effort and may reduce social welfare.
ideas.repec.org /p/fmg/fmgdps/dp251.html   (364 words)

A budget constraint is a measure of the resources the consumer has available to them: the income they have available to them and what it will buy in terms of the prices of the goods the consumer wants to buy.
In terms of the modeling of consumer behavior, we develop a theory of consumer preferences (how utility is determined) then we combine it with a representation of the budget constraint and we use these to examine how a consumer will choose the amounts of various goods to purchase.
So the slope of the budget line is given by the ratio of the price of the good on the horizontal axis to the price of the good on the vertical axis.
lamar.colostate.edu /~alex/EC202H/lec8.html   (1608 words)

 Confiscation and the Budget Constraint
Traditionally, the budget line, which is the graphical representation of the budget constraint, does not take taxes into account.
In the example given by Hall and Lieberman, Max's budget constraint is shown with an income of $150.
So before one has even begun, the modeled budget constraint is seriously affected and the graph is drawn toward the origin before analysis can even begin.
www.15grant.com /mchoward/budgetconstraint.html   (1335 words)

 Bradenton Herald | 10/08/2006 | FDA study casualty of budget constraint   (Site not responding. Last check: 2007-10-11)
The threat to the study, as disclosed in documents and interviews, stems from the chronic shortchanging of the nation's drug safety program.
It is one symptom of a federal agency increasingly constrained by a budget that has failed to keep up with costs.
Even as concerns grow, the agency has budgeted only $1.6 million for such safety studies of medications already on the market; and that sum is scheduled to drop to $900,000 in the coming year.
www.bradenton.com /mld/bradenton/news/local/15705242.htm   (411 words)

 Planet NAGA » Soft budget constraint
By this time, budget departments of Philippine LGUs should be neckdeep in preparing their proposed spending program for 2007.
One of the many failings of Congress ever since is its inability to complete and effect a mandatory review of the code (at least once every 5 years, so that's a minimum of 3) as required under Section 521.
Janos Kornai, a Hungarian economist, coined the term to describe the opportunistic behavior of state-owned enterprises in communist countries to continue operating on a loss because the state is expected anyway to bail them out of financial trouble.
planet.naga.gov.ph /2006/09/21/soft-budget-constraint   (746 words)

 Real Estate   (Site not responding. Last check: 2007-10-11)
If your budget is small for buying a home, you can go ahead and try to get the deal on the incomplete homes.
Budget always is a constraint in buying the home, so the economical homes are the ones, which we all sought after.
People like to buy the home according to their budget and if it is out of their budget, they will not even give it a second thought about the overpriced property.
www.letsmakeitsold.com   (2496 words)

 [No title]
A budget constraint is an equation, graph, or table that shows the bundles available to the consumer.
Then, income is cut in half, as shown in case B. This corresponds to a parallel shift in the budget line with case B represented by budget line #2.
Diagram 6.b.3 shows a pivot in the budget line due to a $5 per unit subsidy for good X. Diagram 6.b.3 a five dollar per unit subsidy for good X causes the budget line to pivot.
www.csun.edu /~hceco008/c6b-adv.doc   (1096 words)

 SSRN-A Political Economy Theory of the Soft Budget Constraint by James Robinson, Ragnar Torvik   (Site not responding. Last check: 2007-10-11)
In this paper we argue that the prevalence of soft budget constraints can be best explained by the political desirability of softness.
We show that because of the dynamic commitment problem inherent in the soft budget constraint, politicians can in essence commit to make transfers to entrepreneurs which otherwise they would not be able to do.
Though the soft budget constraint may induce economic inefficiency, it may be politically rational because it influences the outcomes of elections.
papers.ssrn.com /sol3/papers.cfm?abstract_id=896462   (477 words)

 EFI - Publication Summary   (Site not responding. Last check: 2007-10-11)
By investigating state-owned enterprises in Tanzania before, during and after socialism, the prevalence of the soft budget constraint is examined and an explanation of its existence is suggested.
The soft budget constraint is defined as an informal institution and an invisible-hand explanation of its emergence, persistence and logic is applied.
The soft budget constraint was part of the socialist heritage, was adapted to systemic change, and influenced the direction and character of this change.
www2.hhs.se /EFI/summary/496.htm   (283 words)

 Definition of Budget Constraint
A budget constraint is an accounting identity that describes the consumption options available to an agent with a limited income (or wealth) to allocate among various goods.
It is important to understand that the budget constraint is an accounting identity, not a behavioral relationship.
An agent may well determine his behavior by considering his budget constraint, but his budget constraint is a given element of the problem he faces.
www.econmodel.com /classic/terms/bc.htm   (78 words)

 Consumer Demand Theory
A budget constraint shows the consumer's purchase opportunities as every combination of two goods that can be bought at given prices using a given amount of income.
The budget constraint measures the combinations of purchases that a person can afford to make with a given amount of monetary income.
Utility is at a maximum when increasing wheat by one unit, and correspondingly decreasing rice by one unit, leaves the consumer just as well off as the reverse operation (wheat down one unit, rice up one unit).
instruct1.cit.cornell.edu /Courses/econ101-dl/lecture-demand.html   (784 words)

 ECO 240 | Tutorial 5b
So one's goal of maximizing utility is subject to the constraint imposed by one's budget.
To add this constraint to our model, we need to rewrite it in a form that can be plotted in (F, C) space.
We will use the completed model to analyse how consumer's choose to maximize the satisfaction they receive from the consumption of a bundle of goods, subject to the constraint imposed on their choice by their income and the prices of the goods they buy.
www.ilstu.edu /~mswalber/ECO240/Tutorials/Tut05/Tutorial05b.html   (1037 words)

 Consumer theory - Wikipedia, the free encyclopedia
The consumer will choose the indifference curve with the highest utility that is within the budget constraint.
Increasing the income will shift the budget constraint right since more of both can be bought, and decreasing income will shift it left.
The substitution effect is a price change that changes the slope of the budget constraint, but leaves the consumer on the same indifference curve.
en.wikipedia.org /wiki/Consumer_theory   (793 words)

 Programme and Project Portfolio Management Blog (PPM)
The notion that projects can have expected returns, variances and covariances of return does appeal to me. However, when you apply MPT to a portfolio of securities, you mostly assume a budget constraint to indicate what transactions are allowed.
They love to calculate all of the various metrics pertaining to their project such as the percentages of deliverables completed, tasks currently on schedule, tasks that should have started, of variance from budget, etc. These are all good to know.
The problem is that they spend so much time summarizing and restating data in their spreadsheets, they never talk to the team members about how the project is going and what problems they are having.
www.project-portfolio-management-blog.com   (3283 words)

 Consumer Choice   (Site not responding. Last check: 2007-10-11)
This applet illustrates utility maximization subject to a budget constraint.
The red line is the highest indifference curve achievable under the budget constraint.
This curve "just touches" the budget constraint at a single point.
www.econtools.com /jevons/java/choice/Choice.html   (268 words)

 SSRN-Privatizations in Developing Countries and the Government's Budget Constraint by Emmanuelle Auriol, Pierre Picard   (Site not responding. Last check: 2007-10-11)
In this paper, we study the impact of government's budget constraint on the optimal industrial policy in industries with increasing returns to scale.
We show that privatization is preferred to regulation for intermediate values of the shadow cost of public funds (i.e., the Lagrange multiplier of the government's budget constraint).
Auriol, Emmanuelle and Picard, Pierre M., "Privatizations in Developing Countries and the Government's Budget Constraint" (September 2002).
papers.ssrn.com /sol3/papers.cfm?abstract_id=335021   (317 words)

 National Insolvency: A Test of the US Intertemporal Budget Constraint
If a nation fails to satisfy its intertemporal budget constraint (IBC) then, like a government or a household, either it will become insolvent or it can consume more of its income.
The main purpose of this paper is to establish necessary and sufficient conditions for a nation to satisfy its IBC, and to use these to carry out a test of whether the United States is violating its IBC.
After suitable modifications the techniques used in the literature in testing the government IBC can be used; for example, the balance of payments replaces the government budget constraint.
ideas.repec.org /p/cpr/ceprdp/437.html   (384 words)

It is also true that there are ill-conceived spending cuts in the budget resolution, the purpose of which is to soften the apparent impact of the tax cuts by reducing projected deficits.
The sole function of the budget resolution is to grease the skids for more tax cuts.
Once he finds out that lower taxes means it's time to start cutting vet benefits, the beloved troops live in squalor, grandma won't be able to afford her pills, that pothole he hits on the way to work is only going to get bigger &etc, then he may very slowly start to see the light.
maxspeak.org /gm/archives/00001105.html   (1321 words)

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