The Currency Board in Bulgaria: Theoretical Reflections and Empirical Results


currency board, monetary system, Euro zone, currency exchange rate, economic analysis, gross domestic product, convergence.

Via this article the authors would like to discuss the idea of the inter-section point of theoretical reflections and reported empirical results referring to the currency board in Bulgaria. To achieve the goal defined the article is structured in the following separate sections: first, clarification of the concept of a currency board in light of leading theoretical research; second, critical analysis and evaluation of the characteristics of the currency board in Bulgaria; third, justification of the authors answer regarding the end of the currency board in Bulgaria and its replacement with another system; fourth, econometric analysis and assessment of foreign trade sector influence on the GDP in Bulgaria under the conditions of a fixed currency exchange rate and a high percentage of foreign trade of goods and services in the structure of the GDP; fifth, a study of the currency boards influence on the economic convergence of Bulgaria in comparison with leading EU economies for the period 1998 2012. For the authors, Bulgarias path to membership in the Eurozone while keeping the currency board regime during the whole period of being in the ERM II waiting room is logical and has social and institutional support. The argument for this is that Estonias example of entering the Eurozone by preserving the currency rate at the level of the currency board is the reasonable and rational national project for developing Bulgarias economy and financial system.

JEL: E42, E52, F33, F36
Pages: 12
Price: 2 Points

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