Reflections on the Microeconomic Basis for Soft Budget Constraint in the Market Economy

Historical analysis of the market economy indicates that soft budget constraint is becoming increasingly pervasive and broad-rooted. Using an analysis of micro-level entities in the market economy, this paper describes how soft constraint derives from interdependence among corporations, banks, and the government. Soft constraint is explained in relation to changes in concentrated shareholding ownership, the increasing dominance of the financial sector, and financial insurance. We conclude： 1） concentrated shareholding ownership and institutionalized soft budget constraint create sub-optimal allocation of resources in the market economy; 2） neoclassical microeconomic principles cannot explain the economic actions of organizations in the market economy and should be revised; 3） externalities associated with soft budget constraint have spread across the globe to become both the cause and primary effect of cyclic global financial and economic crises. Hence, the government, banks, and the corporate sector must work together to overhaul supervisory mechanisms. On a global level, governments must collaborate to build a new international economic order. Correcting imbalances in international reserve currencies and fortifying administration of cross-national economic organizations will mitigate the effects of soft budget constraint.

Feminist Perspective on Economic Theory, Policies, and Institutions for Women Workers in the Informal Employment of Indonesian Post-economic Crisis

This paper aims to have a grounded picture regarding the impacts of the economic crises on women workers in the informal employment, identify the economic theory whose application is disadvantageous to the women home-based workers, support recognition of women homeworkers by the policy makers, and empower the workers through exercising their rights. Research methodology for women＇s studies from a feminist perspective is employed covering action-oriented research initiating from the grounded issues, a bottom-up approach, and a participatory method where the researchers act as facilitators. It is necessarily a longitudinal research work with a new paradigm to change the women＇s situation. This methodology is deemed effective to identify impacts of the crises as described in the paper. It can be found that the root cause of women workers＇ exploitation is the economic efficiency theory, while policy development should be specifically designed along with engendering policy makers. Exercising the rights to organize the unorganized women home-based workers is no way repeatable from standard practice of organizing formal workers. All these require action of committed and skilled feminists with adequate praxis resources.

Subsistence Wages, Private Indebtedness and Aggregate Demand＂ A Post Keynesian Classical Interpretation of the Current Crisis

This paper aims at providing an interpretation of economic crises within a theoretical framework where some elements of classical political economy are superimposed on the theoretical framework of the monetary theory of production. The dynamics of wages, of conspicuous consumption on the part of rentiers and of investments are taken into consideration, in order to show that economic crises largely depend on the combination of declining wage shares, increasing financial rents and the reduction of investments.