Fiscal Policy Under a Currency Board Arrangement: Bulgaria's Post-crisis Policy Dilemmas
The paper analyses some policy issues under a currency board arrangement (CBA), focusing on the conduct of fiscal policy which is the only policy instrument at the disposal of the authorities as the CBA precludes an independent monetary policy. It is argued that the loss in degrees of freedom under a CBA restrains considerably the room for fiscal policy manoeuvre, especially in cases of external disturbances or shocks. Within this framework the paper analyses some of the policy challenges that policy makers in Bulgaria have been facing since 1997. It is argued that despite the macroeconomic stabilization and the fiscal consolidation achieved after the introduction of the CBA, some serious economic problems still remain and new ones have emerged; among them are the deterioration in competitiveness and the large losses that SOEs continue to generate. The paper addresses also some more general issues related to fiscal accounting during the transition in the context of the intertemporal budget constraint of the public sector. Attention is drawn to the importance of monitoring not only the conventional fiscal balance but also the broader fiscal balance, including the quasi-fiscal deficit.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
|Length:||45 pages including 5 Tables and 10 Figures|
|Date of creation:||Mar 2000|
|Publication status:||Published as wiiw Research Report|
|Contact details of provider:|| Postal: Rahlgasse 3, A-1060 Vienna|
Phone: (+43-1) 533 66 10
Fax: (+43-1) 533 66 10-50
Web page: http://www.wiiw.ac.at
More information through EDIRC
|Order Information:||Web: http://wiiw.ac.at|
When requesting a correction, please mention this item's handle: RePEc:wii:rpaper:rr:265. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Customer service)
If references are entirely missing, you can add them using this form.