Money, Barter and Inflation in Russia

44 Pages Posted: 20 Sep 2007

See all articles by Byung-Yeon Kim

Byung-Yeon Kim

Sogang University - Department of Economics

Jukka Pirttila

United Nations - World Institute for Development Economics Research (UNU/WIDER); Tampere University of Technology

Jouko Rautava

Bank of Finland - Institute for Economies in Transition (BOFIT)

Multiple version iconThere are 2 versions of this paper

Date Written: December 18, 2001

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.

Keywords: barter, money, inflation, cointegration, error-correction mechanism, Russia

Suggested Citation

Kim, Byung-Yeon and Pirttila, Jukka and Rautava, Jouko, Money, Barter and Inflation in Russia (December 18, 2001). BOFIT Discussion Paper No. 15/2001. Available at SSRN: https://ssrn.com/abstract=1015771 or http://dx.doi.org/10.2139/ssrn.1015771

Byung-Yeon Kim (Contact Author)

Sogang University - Department of Economics ( email )

C.P.O. Box 1142
Seoul 100­611
Korea

Jukka Pirttila

United Nations - World Institute for Development Economics Research (UNU/WIDER) ( email )

Katajanokanlaituri 6B
Helsinki, FIN-00160
Finland

Tampere University of Technology ( email )

P.O. 541, Korkeakoulunkatu 8 (Festia building)
Tampere, FI-33101
Finland

Jouko Rautava

Bank of Finland - Institute for Economies in Transition (BOFIT) ( email )

PO Box 160
Helsinki FI-00101
Finland
+358 10 831 2280 (Phone)
+358 10 831 2294 (Fax)

HOME PAGE: http://www.bof.fi/en/suomen_pankki/organisaatio/asiantuntijoita/rautava_jouko/

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