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Money, Barter and Inflation in Russia

Listed author(s):
  • Byung-Yeon Kim

    (University of Essex)

  • Jukka Pirttilä

    (Bank of Finland)

  • Jouko Rautava

    (Bank of Finland)

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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File URL: http://econwpa.repec.org/eps/mac/papers/0209/0209009.pdf
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Paper provided by EconWPA in its series Macroeconomics with number 0209009.

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Length: 44 pages
Date of creation: 19 Sep 2002
Handle: RePEc:wpa:wuwpma:0209009
Note: Type of Document - pdf; prepared on PC; pages: 44
Contact details of provider: Web page: http://econwpa.repec.org

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