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  • 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.
  • Kaloyan Petkov
    Testing the Damodaran Approach to Estimate the Cost of Equity in Emerging Markets
    JEL: G11, G32, C52
    Keywords: cost of equity, SMAPE, the Damodaran approach
    Summary: The cost of equity is one of the key financial and economic indicators in corporate finance. The purpose of this paper is to test the well-known approach of Damodaran in global emerging markets. The main result of the study is that the Damodaran approach needs to be improved as it maintains constant deviation from the observed ex-post cost of equity.