The paper tests the proposition that money generates value in trade. It examines the data for 5,746 Russian companies for 1997 and finds that money accounts for 24.6 percent of their value-added. The functional form of the return on money in trade is determined to be positive and marginally...

The unusual rise and fall of non-monetary trade (NMT) in the Russian transition has been a subject of heated debates. Yet, this phenomenon is often viewed as a peculiarity that one cannot explain by economic considerations alone. In this paper we show that the resort to NMT was a rational,...

The paper addresses the question of effective tax rates for Russian economic sectors in transition. It presents a detailed account of fiscal environment for 1995 and compares statutory obligations with reported tax liabilities. The paper finds that taxation did not contribute to recession, as...

In the aftermath of sovereign default of August 1998, the hypothesis of virtual economy in Russia developed by Gaddy and Ickes has gained popularity. The hypothesis states that the country has not moved towards free-market economy but developed a system of implicit price subsidization similar to...