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Effects of the Trilemma Policies on Inflation, Growth and Volatility in Bulgaria

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  • Yu HSING

    (Southeastern Louisiana University, USA)

Abstract

This paper finds evidence of the trilemma for Bulgaria, suggesting that exchange rate stability, monetary independence and free capital mobility are binding and constrained. The policy combination of exchange rate stability and monetary independence has been prevalent. More exchange rate stability increases the growth rate of real GDP whereas more monetary independence or free capital mobility reduces the growth rate. The inflation rate, inflation volatility and output volatility are not affected by either one of the three trilemma policies.

Suggested Citation

  • Yu HSING, 2012. "Effects of the Trilemma Policies on Inflation, Growth and Volatility in Bulgaria," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(4(569)), pages 49-58, April.
    • Handle: RePEc:agr:journl:v:4(569):y:2012:i:4(569):p:49-58
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    Cited by:

    1. Gancho Ganchev & Elena Stavrova & Vladimir Tsenkov & Mariya Paskaleva, 2020. "The “impossible trilemma” and the analysis of its validity by visualization through the use of artificial intelligence software," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 4, pages 56-75,76-94.
    2. Mai, Nhat Chi, 2016. "Monetary policies and the macroeconomic performance of Vietnam," OSF Preprints akzy4, Center for Open Science.
    3. Canale, Rosaria Rita & De Simone, Elina & Spagnolo, Nicola, 2021. "Financial markets and fiscal discipline in the Eurozone," Structural Change and Economic Dynamics, Elsevier, vol. 58(C), pages 490-499.
    4. Nitin Arora & Deepika Malik & Rahul Arora, 2022. "Which Combination of Impossible Trinity Choices Ensures Output and Price Stabilities in India? A Sign‐Restricted Vector Autoregressive Analysis," Economic Papers, The Economic Society of Australia, vol. 41(3), pages 260-275, September.
    5. Ramandeep Kaur, 2019. "Sensitivity of Macroeconomic Policy Goals to Trilemma and Quadrelimma Choices," Asian Development Policy Review, Asian Economic and Social Society, vol. 7(4), pages 219-238, December.

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