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The development of non-monetary means of payment


  • Minzyuk, Larysa


This paper develops a model to investigate the private enforcement of non-monetary inter-firm payments in Russia during the 1990s. Since acceptability of means of payment can have a self-reinforcing nature, the dominance of non-monetary means of payment over money in Russia might have been a result of the driving forces of the demonetiziation equilibrium. We propose a very simple search model to explore acceptability of means of payment different from legal tender - fiat money, commodity money, and trade credit. In each case, we show that monetization through the proposed means of payment is always a possible trade pattern.

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  • Minzyuk, Larysa, 2010. "The development of non-monetary means of payment," MPRA Paper 28167, University Library of Munich, Germany, revised 2010.
  • Handle: RePEc:pra:mprapa:28167

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    References listed on IDEAS

    1. Kocherlakota, Narayana R., 1998. "Money Is Memory," Journal of Economic Theory, Elsevier, vol. 81(2), pages 232-251, August.
    2. Guriev, Sergei & Kvassov, Dmitri, 2004. "Barter for price discrimination," International Journal of Industrial Organization, Elsevier, vol. 22(3), pages 329-350, March.
    3. Abreu, Dilip, 1988. "On the Theory of Infinitely Repeated Games with Discounting," Econometrica, Econometric Society, vol. 56(2), pages 383-396, March.
    4. Dalia Marin, 2002. "Trust versus illusion: What is driving demonetization in the former Soviet Union?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 10(1), pages 173-200, March.
    5. Rupert, Peter & Schindler, Martin & Wright, Randall, 2001. "Generalized search-theoretic models of monetary exchange," Journal of Monetary Economics, Elsevier, vol. 48(3), pages 605-622, December.
    6. Fudenberg, Drew & Maskin, Eric, 1986. "The Folk Theorem in Repeated Games with Discounting or with Incomplete Information," Econometrica, Econometric Society, vol. 54(3), pages 533-554, May.
    7. Полтерович В.М., 1999. "Институциональные Ловушки И Экономические Реформы," Журнал Экономика и математические методы (ЭММ), Центральный Экономико-Математический Институт (ЦЭМИ), vol. 35(2), апрель.
    8. Sophie Brana & Mathilde Maurel, 1999. "Barter in Russia: Liquidity Shortage versus Lack of Restructuring," William Davidson Institute Working Papers Series 271, William Davidson Institute at the University of Michigan.
    9. Jones, Robert A, 1976. "The Origin and Development of Media of Exchange," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages 757-775, August.
    10. Klein, Benjamin & Leffler, Keith B, 1981. "The Role of Market Forces in Assuring Contractual Performance," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 615-641, August.
    11. Shouyong Shi, 2006. "Viewpoint: A microfoundation of monetary economics," Canadian Journal of Economics, Canadian Economics Association, vol. 39(3), pages 643-688, August.
    12. Pissarides, Francesca & Singer, Miroslav & Svejnar, Jan, 2003. "Objectives and constraints of entrepreneurs: evidence from small and medium size enterprises in Russia and Bulgaria," Journal of Comparative Economics, Elsevier, vol. 31(3), pages 503-531, September.
    13. Brian Pinto & Vladimir Drebentsov & Alexander Morozov, 2000. "Give Macroeconomic Stability and Growth in Russia a Chance," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 8(2), pages 297-324, July.
    14. Carl Shapiro, 1983. "Premiums for High Quality Products as Returns to Reputations," The Quarterly Journal of Economics, Oxford University Press, vol. 98(4), pages 659-679.
    15. Andrei Yakovlev, 2000. "Barter in the Russian Economy: Classifications and Implications (Evidence from Case Study Analyses)," Post-Communist Economies, Taylor & Francis Journals, vol. 12(3), pages 279-291.
    16. Ricardo de O. Cavalcanti & Neil Wallace, 1999. "A model of private bank-note issue," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 2(1), pages 104-136, January.
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    More about this item


    privately created means of payment; fiat money; commodity money; reputations; Russia;

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • E00 - Macroeconomics and Monetary Economics - - General - - - General

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