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Costs And Benfits Of Euro Adoption In Bulgaria: Lessons Learned From The Long Path Of Bulgaria To The Euro

Author

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  • Daniela Bobeva

    (Economic Research Institute at the Bulgarian Academy of Sciences, Bulgaria)

Abstract

Bulgaria has made a lot of efforts to start the euro adoption process for fifteen years. Despite the stability of the national currency provided by the successfully functioning currency board regime for more than twenty years the BGN is still not allowed in the ERM II.The purpose of this article is to explore the experience of Bulgaria with the adoption of the euro. A dynamic approach is applied by analysing the effects of the process at each stage at three levels: macroeconomic framework, non-financial sector and households. Capitalising on the experience of countries with similar monetary regime the article concludes that nominal convergence is not sufficient to achieve real convergence, and the postponement of the euro adoption ensures a smoother transition of the economy, but deprives it of further incentives for growth and convergence.

Suggested Citation

  • Daniela Bobeva, 2020. "Costs And Benfits Of Euro Adoption In Bulgaria: Lessons Learned From The Long Path Of Bulgaria To The Euro," Economic Science, education and the real economy: Development and interactions in the digital age, Publishing house Science and Economics Varna, issue 1, pages 50-68.
    • Handle: RePEc:vrn:cfdide:y:2020:i:1:p:50-68
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    More about this item

    Keywords

    Euro; Euro adoption; ERM II; Convergence;
    All these keywords.

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook

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