Trust versus illusion: What is driving demonetization in the former Soviet Union?
AbstractThe virtual economy argument for Russia suggests that barter allows the parties to pretend that the manufacturing sector is producing value added by enabling this sector to sell its output at a higher price than its market value. We confront this prediction with the actual pricing behaviour of industrial sectors in Ukraine in 1997. Based on the pricing data of 165 barter deals we find no systematic difference in the pricing behaviour in non-cash transactions across sectors. What appears to matter for the pricing behaviour is whether the firm is on the selling or buying end of the barter transaction. We offer a model that sees this pricing behaviour as a mechanism to deal with the absence of trust and liquidity in the economy.
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Bibliographic InfoArticle provided by The European Bank for Reconstruction and Development in its journal The Economics of Transition.
Volume (Year): 10 (2002)
Issue (Month): 1 (March)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0967-0750
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Other versions of this item:
- Marin, Dalia, 2002. "Trust versus illusion: What is driving demonetization in the former Soviet Union?," Munich Reprints in Economics 19221, University of Munich, Department of Economics.
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- Marin, Dalia & Schnitzer, Monika, 2005.
"Disorganization and financial collapse,"
European Economic Review,
Elsevier, vol. 49(2), pages 387-408, February.
- Marin, Dalia & Schnitzer, Monika, 1999. "Disorganization and Financial Collapse," CEPR Discussion Papers 2245, C.E.P.R. Discussion Papers.
- Marin, Dalia & Schnitzer, Monika, 2005. "Disorganization and financial collapse," Munich Reprints in Economics 19258, University of Munich, Department of Economics.
- Dalia Marin & Monika Schnitzer, 1999. "Disorganization and Financial Collapse," William Davidson Institute Working Papers Series 285, William Davidson Institute at the University of Michigan.
- Dalia Marin & Monika Schnitzer, 2000. "Disorganization and Financial Collapse," CESifo Working Paper Series 339, CESifo Group Munich.
- Jose Noguera & Susan Linz, 2003. "A Theoretical Model of Barter in Russia," CERGE-EI Working Papers wp207, The Center for Economic Research and Graduate Education - Economic Institute, Prague.
- Minzyuk, Larysa, 2010. "The development of non-monetary means of payment," MPRA Paper 28167, University Library of Munich, Germany, revised 2010.
- José Noguera & Susan J. Linz, 2005. "Barter, Credit, and Welfare: A theoretical inquiry into the barter phenomenon in Russia," William Davidson Institute Working Papers Series wp757, William Davidson Institute at the University of Michigan.
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