A model of Russia’s “virtual economy”

Part of the Studies in Economic Design book series (DESI)


The Russian Economy has evolved into a hybrid form, a partially monetized quasi-market system that has been called the virtual economy. In the virtual economy, barter and non-monetary transactions play a key role in transferring value from productive activities to the loss-making sectors of the economy. We show how this transfer takes place, and how it can be consistent with the incentives of economic agents. We analyze a simple partial-equilibrium model of the virtual economy, and show how it might prove an obstacle to industrial restructuring and hence marketizing transition.


Energy Input Manufacturing Sector Manufacturing Firm Price Discrimination Marginal Revenue 
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Copyright information

© Springer-Verlag Berlin Heidelberg 2003

Authors and Affiliations

  1. 1.Department of EconomicsColumbia UniversityNew YorkUSA
  2. 2.Department of EconomicsThe Pennsylvania State UniversityUniversity ParkUSA

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