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Barter and Business Cycles: A Comment and Further Empirical Evidence

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  • Marvasti, Akbar
  • Smyth, David

Abstract

The purpose of this comment is a critical evaluation of the empirical analysis made by Cresti (2005) and her finding that commercial barter behaves differently than corporate barter during the course of business cycles. Here, we correct the arbitrary 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 cycle are occasionally inconsistent, overall the inventory measures and capacity utilization results suggest that barter transactions are counter-cyclical regardless of the size of the business. 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

  • Marvasti, Akbar & Smyth, David, 2008. "Barter and Business Cycles: A Comment and Further Empirical Evidence," MPRA Paper 18258, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:18258
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    References listed on IDEAS

    as
    1. 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.
    2. Kevin F. Ryan & David E. A. Giles, 1998. "Testing for Unit Roots With Missing Observations," Econometrics Working Papers 9802, Department of Economics, University of Victoria.
    3. 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.
    4. Akbar Marvasti & David Smyth, 2001. "The impact of trend and cyclical behaviour of inventories and inflation on barter," Applied Economics Letters, Taylor & Francis Journals, vol. 8(5), pages 351-353.
    5. 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.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Barter; Business Cycles; Error Correction Model; Box-Jenkins ARMA;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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