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Business cycles in Bulgaria and the Baltic countries: an RBC approach

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  • Aleksandar Zdravkov Vasilev

Abstract

This paper explores the business cycle in Bulgaria and the Baltic countries: Estonia, Latvia and Lithuania during the 1993-2005 period. The paper aims at deepening the understanding of the nature of output fluctuations. The neoclassical approach will be employed, much in the spirit of the real business cycle (RBC) literature, which gives a general equilibrium picture of the transition process. The model used in this paper follows the methodology of King et al. (1988). Both the model and data series show that the major drop in output was due to productivity. In addition, the timing of the banking reforms coincides with the improvement of economic performance. This is a strong indication that banking regulations in place were crucial for the output performance throughout the period in Bulgaria and the Baltic countries, a finding that has important implications for economic policy.

Suggested Citation

  • Aleksandar Zdravkov Vasilev, 2009. "Business cycles in Bulgaria and the Baltic countries: an RBC approach," International Journal of Computational Economics and Econometrics, Inderscience Enterprises Ltd, vol. 1(2), pages 148-170.
  • Handle: RePEc:ids:ijcome:v:1:y:2009:i:2:p:148-170
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    Cited by:

    1. repec:eei:journl:v:61:y:2018:i:2:p:47-76 is not listed on IDEAS
    2. Vasilev, Aleksandar, 2016. "A Real-Business-Cycle model with efficiency wages and fiscal policy: the case of Bulgaria," EconStor Preprints 148413, ZBW - German National Library of Economics.
    3. repec:psc:journl:v:9:y:2017:i:4:p:359-377 is not listed on IDEAS
    4. Aleksandar Vasilev, 2016. "Search and Matching Frictions and Business Cycle Fluctuations in Bulgaria," Bulgarian Economic Papers (www.bep.bg) bep-2016-03, St Kliment Ohridski University of Sofia, Faculty of Economics and Business Administration / Center for Economic Theories and Policies, revised Feb 2016.
    5. Vasilev, Aleksandar, 2017. "A Real-Business-Cycle model with reciprocity in labor relations and fiscal policy: the case of Bulgaria," EconStor Preprints 156164, ZBW - German National Library of Economics.
    6. repec:zbw:espost:170575 is not listed on IDEAS
    7. Aleksandar Vasilev, 2017. "A Real-Business-Cycle model with reciprocity in labor relations and a government sector," EERI Research Paper Series EERI RP 2017/09, Economics and Econometrics Research Institute (EERI), Brussels.
    8. Vasilev, Aleksandar, 2018. "The role of energy in a real-business-cycle model with an endogenous capital utilization rate and a government sector: the case of Bulgaria (1999-2016)," EconStor Preprints 173966, ZBW - German National Library of Economics.
    9. Vasilev, Aleksandar, 2018. "A business-cycle-model with monopolistically-competitive intermediary firms and sticky nominal wages: the case of Bulgaria after the introduction of the currency board (1999-2016)," EconStor Preprints 175183, ZBW - German National Library of Economics.
    10. Vasilev, Aleksandar, 2018. "A business-cycle model with a modified cash-in-advance feature, government sector and one-period nominal wage contracts: the case of Bulgaria," EconStor Preprints 174488, ZBW - German National Library of Economics.

    More about this item

    Keywords

    business cycles; productivity; Baltic countries; Bulgaria; Estonia; Latvia; Lithuania; output fluctuations; real business cycle; RBC; banking reforms; economic performance; banking regulations; economic policy.;

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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