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Barter and Business Cycles: Further Empirical Evidence

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  • Akbar Marvasti
  • David J. Smyth

Abstract

Rising interest in barter due to the current world-wide recession has motivated a re-examination of macroeconomic determinants of barter in the U.S. economy, particularly its correlation with the business cycle. This critical evaluation, using the International Reciprocal Trade Association data, addresses, among other issues, whether firm size affect the behavior of firms during business cycles. Here, we deal with replacement of the missing observations by filling them with forecasts using the Box-Jenkins ARMA and Kalman filter methods before performing the unit root and cointegration tests. Although the ECM estimates for various measures of business cycles are occasionally inconsistent, overall the inventory measures and capacity utilization results suggest that barter transactions are counter-cyclical regardless of the firm size. Additionally, we find that barter rises with inflationary trend, dissemination of access to computer technology, tax rates and tax laws requiring disclosure of barter transactions.

Suggested Citation

  • Akbar Marvasti & David J. Smyth, 2011. "Barter and Business Cycles: Further Empirical Evidence," The American Economist, Sage Publications, vol. 56(2), pages 85-97, November.
    • Handle: RePEc:sae:amerec:v:56:y:2011:i:2:p:85-97
    DOI: 10.1177/056943451105600211
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    References listed on IDEAS

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    1. Ian Domowitz & R. Glenn Hubbard & Bruce C. Petersen, 1986. "Business Cycles and the Relationship Between Concentration and Price-Cost Margins," RAND Journal of Economics, The RAND Corporation, vol. 17(1), pages 1-17, Spring.
    2. Akbar Marvasti & David Smyth, 1998. "Barter in the US economy:a macroeconomic analysis," Applied Economics, Taylor & Francis Journals, vol. 30(8), pages 1077-1088.
    3. Peter Kennedy, 2003. "A Guide to Econometrics, 5th Edition," MIT Press Books, The MIT Press, edition 5, volume 1, number 026261183x, April.
    4. Akbar Marvasti & David J. Smyth, 2006. "Barter'S Role In The Money–Income Relationship," Pacific Economic Review, Wiley Blackwell, vol. 11(3), pages 395-408, October.
    5. Gert Peersman & Frank Smets, 2005. "The Industry Effects of Monetary Policy in the Euro Area," Economic Journal, Royal Economic Society, vol. 115(503), pages 319-342, April.
    6. Akbar Marvasti, 2012. "An analysis of barter in the broadcasting industry," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 39(5), pages 537-553, September.
    7. Seabright,Paul (ed.), 2000. "The Vanishing Rouble," Cambridge Books, Cambridge University Press, number 9780521790376, September.
    8. Seabright,Paul (ed.), 2000. "The Vanishing Rouble," Cambridge Books, Cambridge University Press, number 9780521795425, September.
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    Cited by:

    1. Frantisek Milichovsky & Jiri Kolenak, 2014. "Methodology for the Selection of Compensation Trade Tools in SMEs," DANUBE: Law and Economics Review, European Association Comenius - EACO, issue 3, pages 213-224, September.
    2. Jiří Koleňák & František Milichovský, 2015. "Development of Creative Thinking in Connection with Compensation Trades," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 63(2), pages 559-566.

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