Barter's Role In the Money-Income Relationship

Document Type

Article

Publication Date

10-1-2006

Department

Finance, Real Estate, and Business Law

Abstract

This paper deals with a reassessment of the money-income relation and predictability of changes in GDP with innovations in money in the presence of barter. Organized barter as a method of transaction, through barter exchanges, has been growing rapidly in the US economy. With the introduction of computers and the use of a credit system which allows non-simultaneous transactions, barter exchanges have found new opportunities to offer an alternative to monetary transactions. Analysis of data from the 1974-96 period provides some evidence suggesting that inclusion of barter in the output function improves the marginal predictability of money.

Publication Title

Pacific Economic Review

Volume

11

Issue

3

First Page

395

Last Page

408

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