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Chances for fiscal and monetary impact on Bulgaria’s economic cycle

Author

Listed:
  • Ivan Todorov
  • Aleksander Aleksandrov

Abstract

The chances for fiscal and monetary influence on the business cycle of Bulgaria under a currency board arrangement have been analyzed. The determinants of Bulgaria’s business cycle phase and output gap from the first quarter of 2000 till the second quarter of 2017 have been identified. The effects of minimum reserve requirements, fiscal balance, government revenue, government expenditure and government debt on the business cycle phase and the output gap have been studied. Two research methods have been employed – logistic regression and ordinary least squares regression of times series data. The study results imply that all mentioned variables except for government debt have a statistically significant impact on the output gap. The business cycle phase is significantly affected by all mentioned variables with the exception of government expenditure.

Suggested Citation

  • Ivan Todorov & Aleksander Aleksandrov, 2018. "Chances for fiscal and monetary impact on Bulgaria’s economic cycle," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 3, pages 83-92.
    • Handle: RePEc:bas:econth:y:2018:i:3:p:83-92
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    References listed on IDEAS

    as
    1. Arturo Estrella & Frederic S. Mishkin, 1998. "Predicting U.S. Recessions: Financial Variables As Leading Indicators," The Review of Economics and Statistics, MIT Press, vol. 80(1), pages 45-61, February.
    2. Ivan Todorov, 2017. "Bulgaria’s Cyclical Position and Market (Dis)equilibria," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 5, pages 30-64.
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    More about this item

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy

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