The paper investigates how barter can be used to finance imports and restore the creditworthiness of highly indebted countries when reputation as an enforcement mechanism for credit repayment does not work. The authors argue that payments in goods can be used to collateralize a trade credit and...

Starting with the international debt crisis in the early 1980s the volume of international barter trade increased substantially. This paper examines how barter can help highly indebted countries to finance imports if they cannot use standard credit arrangements. We argue that payment in goods is...