Barter contracts are more prevalent in international trade than one would expect, and they play a prominent role in transition economies. Dalia Marin and Monika Schnitzer use sophisticated theory to shed light on this phenomenon, and test their theoretical predictions with rich data sets. This is a first-rate monograph.
Elhanan Helpman, Department of Economics, Harvard University
Dalia Marin and Monika Schnitzer have produced the first serious theory of barter in emerging market economies. Using the methodology and techniques of modern contract theory, they show how barter trade can mitigate contractual enforcement problems in relationships involving moral hazard in technology trade and debt repayments. They also provide an illuminating analysis of barter in transition economies where firms are both highly credit-constrained and operating in a non-competitive environment with a small number of suppliers and customers. This book will become a classical reference in the fields of transition, international trade, and international finance, and also for all students and researchers interested in economic development and institutions.
Philippe Aghion, Department of Economics, Harvard University
Barter is the oldest form of economic exchange, but, in the modern world, it has largely been superseded by monetary and credit transactions. Nevertheless, Dalia Marin and Monika Schnitzer make a compelling and intriguing case that, if planned with care, barter can play a valuable role in both international trade and transitional economies.
Eric Maskin, A.O. Hirschman Professor of Social Science, Institute for Advanced Study
