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Money, Barter and Inflation in Russia

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Author Info

  • Byung-Yeon Kim

    (University of Essex)

  • Jukka Pirttilä

    (Bank of Finland)

  • Jouko Rautava

    (Bank of Finland)

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 EconWPA in its series Macroeconomics with number 0209009.

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Length: 44 pages
Date of creation: 19 Sep 2002
Date of revision:
Handle: RePEc:wpa:wuwpma:0209009

Note: Type of Document - pdf; prepared on PC; pages: 44
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Web page: http://128.118.178.162

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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. 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.
  2. 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.
  3. 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.
  4. Richard B. Goud Jr., 2002. "Inter-Firm Non-Monetary Transactions in Russia: A Literature Review," Development and Comp Systems 0207001, EconWPA.
  5. Antje Hildebrandt, 2002. "Too many to fail? Inter-enterprise arrears in transition economies," Development and Comp Systems 0212001, EconWPA.
  6. 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.
  7. Chen, Shikuan & Kao, Yi-Cheng, 2010. "Money, barter, and consumption interdependence," Economics Letters, Elsevier, vol. 106(2), pages 119-121, February.
  8. 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.

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