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  • Yanko Hristozov
    Does the Introduction of the Euro Lead to High Inflation? Myth or Fact?
    JEL: E31, E42
    Keywords: euro, eurozone, inflation
    Summary: The replacement of the local currency with the Euro has led to a number of discussions, commentaries and arguments, most of which refer to issues related to an increase of the common levels of the prices of goods and services. The subject of the research comprises the countries which adopted the common European currency after the year 2007. Cyprus and Malta are not discussed due to pages limit. The purpose of the article is to discuss the facts related to the myths about high inflation after the adoption of the Euro and to ascertain whether this myth is significant or whether it can be refuted. In order to accomplish this, we must first study the experience of the newly joined Member States when the common currency was introduced; then we analyze the inflation rates and the changes in the years following their admission to the eurozone. The thesis that is to be proven or rejected is that the adoption of the Euro does not have significant impact on the prices of goods and services in the country that adopts the new currency, whereas if inflation processes are observed, their rates coincide with those of the preceding years.
  • Lachezar Borisov
    THE RELATIONSHIP BETWEEN FOOD PRODUCTION PRICES AND INFLATION IN BULGARIA
    JEL: C52, E31, E37
    Keywords: producer price index for food products, consumer price index for food products, inflation, forecasting
    Summary: The study aims to find relationships between the total producer price index for food products and the harmonized consumer price index for food products in Bulgaria. The analysis of the relationships aims to reveal the impact of producer prices on the final consumer price of food products, as well as the period in which the strongest relationships are present. The sharp rise in food prices in Bulgaria, the macroeconomic forecasts for the continuation of this trend and their impact on the welfare of citizens make it necessary to analyse various interrelationships that serve the study and forecasting of certain processes in the country. The study concludes that there is a causal relationship between the total producer price index for food products and the harmonized consumer price index for food products in Bulgaria. In contrast to the general case where inflationary processes are transmitted from producer prices to consumer prices with a lag of 5 months, in the case of food products this happens within the same month.