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Barter in the US economy:a macroeconomic analysis

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  • Akbar Marvasti
  • David Smyth

Abstract

In this paper, a statistical model is developed to examine the determinants of the growing level of barter transactions in the US. Although a barter system is believed to be Pareto inferior to a money system, recent statistics of the estimated level of barter transactions in the US show a rapidly growing interest by large corporations as well as individuals in this type of trade. The primary obstacle in empirical research in this area is the difficulty of measuring the size of barter transactions. Here, data from barter exchange organizations are used to test the significance of several variables. The Ordinary Least Squares, and Cointegration and Error Correction Models are employed as two alternative empirical techniques to analyse the data. The results support the counter-cyclical arguments as well as the inflation factor. However, the notion of tax evasion as a motive in organized barter receives only a partial support.

Suggested Citation

  • Akbar Marvasti & David Smyth, 1998. "Barter in the US economy:a macroeconomic analysis," Applied Economics, Taylor & Francis Journals, vol. 30(8), pages 1077-1088.
    • Handle: RePEc:taf:applec:v:30:y:1998:i:8:p:1077-1088
    DOI: 10.1080/000368498325246
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    References listed on IDEAS

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    1. Laumas, Prem S, 1990. "Monetization, Financial Liberalization, and Economic Development," Economic Development and Cultural Change, University of Chicago Press, vol. 38(2), pages 377-390, January.
    2. John Bryant & Neil Wallace, 1984. "A Price Discrimination Analysis of Monetary Policy," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 51(2), pages 279-288.
    3. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    4. repec:bla:kyklos:v:38:y:1985:i:2:p:249-67 is not listed on IDEAS
    5. David J. Pyle, 1989. "Tax Evasion and the Black Economy," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-08488-3, March.
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    1. 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.
    2. 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.

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