Inter-Firm Non-Monetary Transactions in Russia: A Literature Review

Development and Comp Systems from EconWPA

Abstract: This paper provides a comprehensive literature review of the use of non- monetary transactions (barter, debt offsets, etc.) in Russia since the fall of Communism. The two primary theories are the credit crunch (liquidity constraint) theory and the virtual economy theory. The former relates to the lack of access to bank credit and cash and the rise of non-monetary transactions as a survival mechanism that oils the gears of the market. The latter asserts that barter is a symptom of a system by which the value added firms (such as Gasprom) subsidize the value destroying firms (the 'white elephants'). Barter allows the two players to arbitrarily set prices so that the value added firm can avoid some of the profit taxes while the value destroying firms can stay alive.

Keywords: barter; non-monetary; Russia; demonetization; transition (search for similar items in EconPapers)
JEL-codes: O P (search for similar items in EconPapers)
Date: Written 2002-07-01
Note: Type of Document - PDF; prepared on Mac OS X; pages: 20; figures: none. I have not published this but I would like to make it available to others studying the demonetization of Russia since the end of Communist rule.
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http://129.3.20.41/eps/dev/papers/0207/0207001.pdf (application/pdf)

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