Abstract
This paper studies the barter industry developed in North America during the 1950s, pointing out some of its main characteristics. Thus, it examines its two main sectors: (i) corporate barter and (ii) commercial barter. Contrary to expectations, the analysis of official data shows that this phenomenon is essentially pro-cyclical for the commercial barter component. Moreover, commercial barter activity turns out to be complementary to the cash economy. While the two sectors display some differences in their pattern, they both help firms to increase their profits.
Acknowledgements
I am grateful to Fatemeh Shadman for her important suggestions in econometric matters and valuable comments on previous drafts of this paper. I also thank Claude d’Aspremont, Enrico Minelli, Reinhilde Veugelers and Hideki Yamawaki for helpful discussions and comments, and Rosella Nicolini for useful hints. Any remaining errors are solely my own responsibility.
Notes
Atwood Richard was acquired by the international barter company Argent Trading LLC in 2000.
According to the Phillips–Perron (PP) test, the GDP series is found to be stationary in first differences with constant and trend. However, with larger samples the PP test confirms the ADF test results. Given the results of Leybourne and Newbold (Citation1999a, Citationb), we have decided to rely mainly on the ADF tests for our analysis.
This result is confirmed also by the PP test.