Trust vs Illusion: What is driving Demonetization in Russia?

The virtual economy argument for Russia suggests that barter allows
the parties to pretend that the manufacturing sector is producing
value by enabling this sector to sell its output at a higher price
than its market value. We confront this prediction with the actual
pricing behavior of industrial sectors in the Ukraine in 1997.
Based on pricing data of 165 barter deals we find no systematic
difference in the pricing behavior in barter across sectors. What
appears to matter for the pricing behavior is whether the sector is
on the selling or buying end of the barter transaction. We offer an
alternative explanation which sees this pricing behavior as a
mechanism to deal with the absence of trust and financial
discipline in the economy.