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Monetary and Fiscal Policies in Bulgaria:Lessons from the Historical Record


  • Kalina Dimitrova

    (Bulgarian National Bank)


There are two aspects through which economic policy could influence the situation of the economy – monetary and fiscal. Monetary and fiscal policies have different and sometimes controversial goals to achieve by the means of specific instruments. While the mission of the central banks is usually price stability, governments usually sets their goals in the realm of economic growth and employment. Fiscal institutions however, often use inflation in order to derive revenues (seigniorage) and finance budget deficits. Hence, inflation is viewed as public finance phenomenon (Barro, 1979; Mankiw, 1987; Grilli, 1989). The purpose of this paper is to present the historical perspective on the behaviour of the monetary and fiscal policies pursued in Bulgaria from 1879 when the Bulgarian National Bank was established (soon after the liberation of from the Ottoman Empire). Furthermore, having historical time series of monetary and fiscal indicators, gives us the chance to study the link between government budget problems, monetary variables’ fluctuations and inflation dynamics under different monetary episodes.

Suggested Citation

  • Kalina Dimitrova, 2011. "Monetary and Fiscal Policies in Bulgaria:Lessons from the Historical Record," Yearbook of the Faculty of Economics and Business Administration, Sofia University, Faculty of Economics and Business Administration, Sofia University St Kliment Ohridski - Bulgaria, vol. 9(1), pages 89-107, March.
  • Handle: RePEc:sko:yrbook:v:9:y:2011:i:1:p:89-107

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    Cited by:

    1. Kalina Dimitrova & Luca Fantacci, 2009. "Financial stability, monetary autonomy and fiscal interference: Bulgaria in search of its way, 1879-1913," SEEMHN papers 3, National Bank of Serbia.

    More about this item


    monetary and fiscal policy; inflation; exchange rate.;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • 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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