Money, Barter, and Inflation in Russia

Journal of Comparative Economics 32(2):297-314, 2004, DOI: 10.1016/S0147-5967(04)00022-8

Posted: 6 Sep 2014

See all articles by Jukka Pirttila

Jukka Pirttila

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

Byung-Yeon Kim

Seoul National University

Date Written: February 1, 2004

Abstract

This paper analyzes relationships among money, barter, and inflation in Russia during the transition period. Following the development of a theoretical framework that introduces barter into a standard macroeconomic model for a small, open economy, we estimate the model using structural cointegration and vector error-correction methods. Our findings suggest that Russian barter resulted partly from output losses, and, to a lesser extent, from the reduction in real money balances. We also find that increases in barter are affected by inefficiencies in the banking sector. Our results imply that increased barter contributed to generating persistent inflation and output decline in Russia.

JEL Classification: C32, E31, E51, P24

Suggested Citation

Pirttila, Jukka and Kim, Byung-Yeon, Money, Barter, and Inflation in Russia (February 1, 2004). Journal of Comparative Economics 32(2):297-314, 2004, DOI: 10.1016/S0147-5967(04)00022-8 . Available at SSRN: https://ssrn.com/abstract=2491811

Jukka Pirttila (Contact Author)

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

Byung-Yeon Kim

Seoul National University ( email )

San 56-1, Silim-dong, Kwanak-ku
Seoul 151-742
Korea

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