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Barter, Credit, and Welfare: A theoretical inquiry into the barter phenomenon in Russia

Author

Listed:
  • Jos?? Noguera
  • Susan J. Linz
Abstract
This paper develops a model to investigate the welfare implications of barter in Russia and other transition economies during the 1990s. We argue that barter is a welfare-improving phenomenon that acts as a defense mechanism against monetary instability. When firms react to tighter credit markets by switching to barter, the risk they face diminishes, allowing for a higher level of production.

Suggested Citation

  • Jos?? Noguera & Susan J. Linz, 2005. "Barter, Credit, and Welfare: A theoretical inquiry into the barter phenomenon in Russia," William Davidson Institute Working Papers Series wp757, William Davidson Institute at the University of Michigan.
    • Handle: RePEc:wdi:papers:2005-757
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    File URL: http://deepblue.lib.umich.edu/bitstream/2027.42/40143/3/wp757.pdf
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    References listed on IDEAS

    as
    1. Wendy Carlin & Steven Fries & Mark Schaffer & Paul Seabright, 2000. "Barter and Non-Monetary Transactions in Transition Economies: Evidence from a Cross-Country Survey," CERT Discussion Papers 0004, Centre for Economic Reform and Transformation, Heriot Watt University.
    2. Dalia Marin & Monika Schnitzer, 2003. "Creating Creditworthiness through Reciprocal Trade," Review of International Economics, Wiley Blackwell, vol. 11(1), pages 159-174, February.
    3. Brana, S. & Maurel, M., 1999. "Barter in Russia : Liquidity Shortage Versus Lack of Restructuring," Papiers d'Economie Mathématique et Applications 1999.98, Université Panthéon-Sorbonne (Paris 1).
    4. Marvasti, A. & Smyth, David J., 1999. "The effect of barter on the demand for money: an empirical analysis," Economics Letters, Elsevier, vol. 64(1), pages 73-80, July.
    5. Dalia Marin & Daniel Kaufmann & Bogdan Gorochowskij, 2000. "Barter in Transition Economies: Competing Explanations Confront Ukranian Data," William Davidson Institute Working Papers Series 287, William Davidson Institute at the University of Michigan.
    6. Susan J Linz & Gary Krueger, 1998. "Enterprise Restructuring in Russia's Transition Economy: Formal and Informal Mechanisms," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 40(2), pages 5-52, July.
    7. Saul Estrin & Alan A. Bevan & Boris Kuznetsov & Mark E. Schaffer & Manuela Angelucci & Julian Fennema & Giovanni Mangiarotti, 2001. "The Determinants of Privatised Enterprise Performance in Russia," William Davidson Institute Working Papers Series 452, William Davidson Institute at the University of Michigan.
    8. 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.
    9. Marin, Dalia & Huang, Haizhou & Xu, Chenggang, 2002. "Financial Crisis, Economic Recovery and Banking Development in Former Soviet Union Economies," Discussion Papers in Economics 27, University of Munich, Department of Economics.
    10. Sergei Aukutsionek, 1998. "Industrial barter in Russia," Post-Communist Economies, Taylor & Francis Journals, vol. 10(2), pages 179-188.
    11. 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.
    12. Seabright,Paul (ed.), 2000. "The Vanishing Rouble," Cambridge Books, Cambridge University Press, number 9780521795425, September.
    13. Pyle, William, 2002. "Overbanked and Credit-Starved: A Paradox of the Transition," Journal of Comparative Economics, Elsevier, vol. 30(1), pages 25-50, March.
    14. Susan Linz, 2000. "Restructuring with What Success? A Case Study of Russian Firms," William Davidson Institute Working Papers Series 324, William Davidson Institute at the University of Michigan.
    15. Seabright,Paul (ed.), 2000. "The Vanishing Rouble," Cambridge Books, Cambridge University Press, number 9780521790376, September.
    16. Andrei Kuznetsov & Olga Kuznetsova, 2003. "Institutions, Business and the State in Russia," Europe-Asia Studies, Taylor & Francis Journals, vol. 55(6), pages 907-922.
    17. Commander, Simon & Dolinskaya, Irina & Mumssen, Christian, 2002. "Determinants of barter in Russia: an empirical analysis," Journal of Development Economics, Elsevier, vol. 67(2), pages 275-307, April.
    18. 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.
    19. Jose Noguera, 2004. "The transmission mechanism to barter," CERGE-EI Working Papers wp243, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    20. Susan J Linz, 2001. "Restructuring with What Success? A Case Study of Russian Firms," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 43(1), pages 75-99, April.
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    Cited by:

    1. Yangyang Huang & Zhenyang Pi & Weiguo Fang, 2021. "Trade Credit with Barter in a Capital-Constrained Supply Chain," Sustainability, MDPI, vol. 13(20), pages 1-15, October.

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    More about this item

    Keywords

    Barter; welfare; Russia; money; credit; payment system; interest rate;
    All these keywords.

    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • P20 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - General
    • P21 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Planning, Coordination, and Reform
    • P23 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Factor and Product Markets; Industry Studies; Population
    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights

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