Modern Trade and Barter and The Economy

It is a rule of thumb that modern trade and barter is more active
in a slow economy. The reasons are simple: when cash is scarce,
businesses are more apt to consider and implement alternative
methods of obtaining the things they need to continue
operating.
Many times, these businesses become lifetime users of
reciprocal trade regardless of the economy. This is especially
true when they belong to a reputable exchange system such as
those represented by IRTA membership

The reality is that most modern economies lack fully elastic
currency that is capable of expanding with the growth of
production and providing the liquidity needed to clear product
and service markets. This is mostly due to the fact that the
money supply is controlled by monetary authorities who need
to have their eyes fixed on particular economic objectives such
as curbing inflation, ensuring full employment, protecting the
value of the currency in foreign exchange markets, etc.
Balancing between these in advanced economies often leads to
monetary restriction thus restraining the flow of spending in the
cash economy, limiting demand for output and creating excess
capacity. By increasing demand for goods and services through
reciprocal trade, it generates additional employment, production,
and purchasing power. It also results in a higher rate of capacity
utilization and enables firms to spread their overhead costs over
more units of output, thereby reducing average costs and
lessening inflationary pressures.

Modern trade and barter helps alleviate monetary stringency,
puts unutilized capacity to work, and speeds up the flow of
goods and services to their more productive uses. It thus adds
an important measure of flexibility to the trade and payments
system and market adjustment mechanisms of the domestic
and international economies at a period in history when global
economic organization is undergoing a dramatic restructuring.
Reciprocal trade, therefore, should be encouraged.