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Money, Barter and Inflation in Russia

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  • Kim, Byung-Yeon

    ()
    (BOFIT)

  • Pirttilä, Jukka

    ()
    (BOFIT)

  • Rautava, Jouko

    ()
    (BOFIT)

Abstract

Using a macroeconometric framework, this paper analyses relationships among money, barter and inflation in Russia during the transition period. Following the development of a theoretical framework that introduces barter in a standard small open economy macro model, we estimate our model using structural cointegration and vector error correction methods. Our findings suggest that barter has resulted partly from output losses and partly from a reduction in real money balances, but to a lesser extent. There is some evidence that the effect of barter on prices is less than that of money. We also find that increases in barter are affected by banking failure. Our results imply that a macro model that excludes barter fails to capture all the relevant information for inference on money and inflation in Russia.

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Bibliographic Info

Paper provided by Bank of Finland, Institute for Economies in Transition in its series BOFIT Discussion Papers with number 15/2001.

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Length: 44 pages
Date of creation: 19 Dec 2001
Date of revision:
Handle: RePEc:hhs:bofitp:2001_015

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Postal: Bank of Finland, BOFIT, P.O. Box 160, FI-00101 Helsinki, Finland
Phone: + 358 10 831 2268
Fax: + 358 10 831 2294
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Web page: http://www.suomenpankki.fi/bofit_en/
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Keywords: barter; money; inflation; cointegration; error-correction mechanism; Russia;

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References

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Citations

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Cited by:
  1. Korhonen, Iikka & Mehrotra, Aaron, 2007. "Money demand in post-crisis Russia: De-dollarisation and re-monetisation," BOFIT Discussion Papers 14/2007, Bank of Finland, Institute for Economies in Transition.
  2. Chen, Shikuan & Kao, Yi-Cheng, 2010. "Money, barter, and consumption interdependence," Economics Letters, Elsevier, vol. 106(2), pages 119-121, February.
  3. Zavkidjon Zavkiev, 2005. "Estimating A Model Of Inflation In Tajikistan," CAMA Working Papers 2005-27, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
  4. Fleischman, Gary & Herz, Paul, 2005. "An empirical investigation of trends in barter activity in the Russian Federation," The International Journal of Accounting, Elsevier, vol. 40(1), pages 39-63.
  5. Richard B. Goud Jr., 2002. "Inter-Firm Non-Monetary Transactions in Russia: A Literature Review," Development and Comp Systems 0207001, EconWPA.
  6. Antje Hildebrandt, 2002. "Too many to fail? Inter-enterprise arrears in transition economies," Development and Comp Systems 0212001, EconWPA.
  7. Hildebrandt, Antje, 2002. "Too many to fail? Inter-enterprise arrears in transition economies," BOFIT Discussion Papers 11/2002, Bank of Finland, Institute for Economies in Transition.
  8. Mechthild SCHROOTEN, 2003. "Fiscal Federalism And Regional Development In Russia," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 18, pages 53-72.

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