Money, Barter, and Inflation in Russia

Posted: 13 Oct 2004

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

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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

Kim, Byung-Yeon and Pirttila, Jukka, Money, Barter, and Inflation in Russia. Journal of Comparative Economics, Vol. 32, No. 2, pp. 197-373, 2004. Available at SSRN: https://ssrn.com/abstract=603063

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

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