IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/2570.html
   My bibliography  Save this paper

Trust Vs Illusion: What is Driving Demonetization in Russia?

Author

Listed:
  • Marin, Dalia

Abstract

The virtual economy argument for Russia suggests that barter -a payment in goods rather than cash - allows the parties to pretend that the manufacturing sector is producing value added by enabling this sector to sell its output at a higher price than its market value. We confront this prediction with the actual pricing behaviour of industrial sectors in the Ukraine in 1997. Based on pricing data of 165 barter deals we find no systematic difference in the pricing behaviour in non-cash transactions across sectors. What appears to matter for the pricing behaviour is whether the firm is on the selling or buying end of the barter transaction. We offer a model that sees this pricing behaviour as a mechanism to deal with the absence of trust and liquidity in the economy.

Suggested Citation

  • Marin, Dalia, 2000. "Trust Vs Illusion: What is Driving Demonetization in Russia?," CEPR Discussion Papers 2570, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:2570
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP2570
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kim, Byung-Yeon & Pirttila, Jukka, 2004. "Money, barter, and inflation in Russia," Journal of Comparative Economics, Elsevier, vol. 32(2), pages 297-314, June.
    2. Gary Krueger & Susan J. Linz, 2000. "Virtual Reality: Barter and Restructuring in Russian Industry," William Davidson Institute Working Papers Series 465, William Davidson Institute at the University of Michigan.
    3. Leonid KOSALS, 2005. "Industrial Defense Enterprises in the Russian Transition to a Capitalist System: Institutional Restrictions on Development," The Journal of Comparative Economic Studies (JCES), The Japanese Society for Comparative Economic Studies (JSCES), vol. 1, pages 11-23, July.
    4. Vasily Astrov & Korkut Boratav & Sandor Richter, 2002. "Monthly Report 05/2002," wiiw Monthly Reports 2002-05, The Vienna Institute for International Economic Studies, wiiw.
    5. Agapov Stanislav & Boyarchenko Svetlana & Levendorsky Sergey, 2003. "A Three-Sector Model of the Russian Virtual Economy," EERC Working Paper Series 02-06e, EERC Research Network, Russia and CIS.

    More about this item

    Keywords

    Trust; Trade credit; imperfect input and capital markets; the virtual economy;
    All these keywords.

    JEL classification:

    • D20 - Microeconomics - - Production and Organizations - - - General
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • P30 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:2570. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://www.cepr.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.