Barter and Business Cycles: A Comment and Further Empirical Evidence

Akbar Marvasti and David Smyth

MPRA Paper from University Library of Munich, Germany

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.

Keywords: Barter; Business Cycles; Error Correction Model; Box-Jenkins ARMA (search for similar items in EconPapers)
JEL-codes: C22 E32 (search for similar items in EconPapers)
Date: 2008-01-15
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:18258

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