Fear of floating

This paper uses unique household survey data to investigate the expected effects of a switch from a fixed exchange rate regime to a floating exchange rate regime in Bulgaria during the global financial crisis. The data show that the public associated such a switch with a contraction of output, higher prices, a decline in exports, and an overall deterioration of economic welfare. These expectations fuelled a strong opposition to removing the fixed exchange rate. Thus, the survey data allow us to investigate why a switch from a fixed exchange rate to a floating exchange rate did not take place.     

金融危机下保加利亚的科技发展政策及走向

本文介绍了在全球金融危机的背景下，保加利亚作为欧洲一个经济尚欠发达的小国，在科技投入不足的情况下，采取相对务实的科技发展政策、提高应用科学研究项目比例、大力开展科技成果转化活动的情况。     

State enterprise performance and soft budget constraints: The case of Bulgaria

This paper analyses the performance of state enterprises in Bulgaria during 1992-94. Consistent with the literature on other transitional economies, this paper finds that one key factor underlying (the lack of) enterprise adjustment in Bulgaria during this period was the availability of financing. Empirically, the (lack of) past adjustment and the softness of finance are the best predictors of current adjustment. Many state enterprises, mostly smaller ones, appear to have adjusted to the new economic structure, partly in response to tighter budget constraints. However, a number of large, hard-core lossmaking state enterprises did not adjust, due primarily to the soft budget constraints that they faced. These enterprises crowded out profitable enterprises, both public and private, through their large financing requirements, adversely affecting economic growth. Moreover, continued bank financing of these large loss-makers decapitalized the banking system, and budgetary financing of their losses, largely through tax arrears, has undermined fiscal policy. This lack of enterprise adjustment and the resulting financial indiscipline lies at the core of the macroeconomic difficulties that Bulgaria has recently faced.     

Bulgaria’s hyperinflation in 1997: transition,banking fragility and foreign exchange

This article has two objectives: to study the 1997 episode of hyperinflation in Bulgaria, and to compare and contrast this analysis with the post-Keynesian theoretical approach. This approach highlights the role of three components observed simultaneously in order to understand the emergence of hyperinflation: a virulent distributive conflict; the presence of indexing mechanisms; and finally, flight from domestic currency into one or more foreign currencies. The article reveals that a transitional economy like that of Bulgaria in the 1990s may generate hyperinflation in the absence of any violent distribution conflict: the transition and the banking crisis engender inflation. The foreign exchange rate is decisive in the emergence of hyperinflationary dynamics (and therefore mistrust of domestic currency). This interpretation of hyperinflation is confirmed by an econometric analysis.     

Credit Risk Determinants for the Bulgarian Banking System

Using an autoregressive distributed lag model, this paper examines the factors that influence the credit risk of the Bulgarian banking system over the decade 2001–2010, as measured by non-performing loans. Recent papers aim to identify the determinants of non-performing loans using a cross-country modelling framework. As the South East European region (SEE) is non-homogeneous, our analysis is country-specific and captures the timeline between the bank privatisation era up to the global financial crisis and the ensuing Greek crisis. The contribution of our paper is twofold: it uses the ARDL modelling framework that is scarcely employed in related studies but also investigates spillover effects from the Greek crisis in view of the material presence of Greek banks in Bulgaria. In accordance with previous studies, the findings suggest that the credit risk determinants of Bulgarian banks should be sought endogenously in macroeconomic variables and industry-specific factors but also in exogenous factors. We evidence a pronounced role of the global financial crisis and the country’s bank regulatory framework. The Greek debt crisis appears to play an immaterial role indicating that Greek banks have not been a Trojan horse in the Bulgarian banking system.     

The problem of bad loans and enterprise indebtedness in Bulgaria

Conclusions The problem of bad enterprise and bank debts has developed into one of the most acute economic problems in PETs. The general delay in implementing comprehensive policy measures to combat this issue as well as mismanagement contributed to the snow-balling of bad loans. In the case of Bulgaria this led to a major financial crisis and the authorities had to undertake a large-scale rescue operation.The experience of the past three years or so indicates that there are no ideal definitive solutions to the bad-loan problem. All bad-loan management options discussed in the literature and experimented with in PETs have serious drawbacks and their inherent cost is usually quite high. So the bad-loan problem has turned into one of the many dilemmas that economic policy makers of the PETs have to face up to.The Bulgarian approach to the bad loans issue builds on ideas that have been debated in the literature and adds some new and original aspects. It is an attempt to link the process of cleaning up the bad loans to the recapitalization of commercial banks and to the process of privatizing SOEs. In this respect it can be regarded as an element of a broader policy aimed at speeding-up the process of economic transformation of the country. At the same time, the Bulgarian approach has a number of weak features that may have undesirable consequences.     

Work incentives and other effects of the transition to social assistance in the transition economies: Evidence from Bulgaria

The compensation levels, duration structure and means-tested aspects of the income support system for the unemployed in Bulgaria are considered. The available evidence points to the emergence of long term unemployment as a major problem, to a system of social assistance (SA) which is not overly generous and to growing poverty. Nevertheless, econometric analysis using micro data indicates that disincentives for job search exist for SA recipients. In the context of an acute fiscal crisis, systemic efficiency might be improved by restricting access to some benefits, by some changes in scaling, in moves towards targeted contributions and in improvements in administrative capacity.     

Liquidity Constraints and Investment in Transition Economies

We use Bulgarian firm-level data to investigate the impact of liquidity constraints on investment performance. Internal funds are an important determinant of investment in most industrialized countries. We test whether internal funds are important for firm investment during the current transition process in Bulgaria. We use a simple accelerator model of investment to test whether liquidity constraints are relevant in the case of Bulgaria. Our estimations are based on data for the period 1993–95, prior to the Bulgarian financial crisis in 1996–97. It turns out that Bulgarian firms are liquidity constrained, and that firms' size and financial structure help to distinguish between firms that are more and less liquidity constrained. In our view, liquidity constraints can be given a different interpretation in the case of transition economies as compared to Western economies. A more in depth analysis of the data reveals that liquidity constraints, and consequently the access to external funds for Bulgarian firm investment, are to be seen against the background of soft-budget constraints and the failure of the financial system to enforce an efficient allocation of funds. In our view, the lack of liquidity constraints may actually be seen as a sign of financial weakness in the case of Bulgaria.     

Exports,investments and economic development of pre-accession countries of the European Union: an empirical investigation of Bulgaria and Romania

This paper attempts to analyse the relationship between exports, investments and economic development in two pre-accession countries of the European Union, Bulgaria and Romania. For investigation of this relationship a multivariate autoregressive VAR model is used. The results of cointegration analysis showed that there is one cointegrated vector among exports, investments and economic growth for the two countries. Granger causality tests based on error correction models (ECM) indicated that there is a ‘strong Granger causal’ relation between economic growth and exports as well as between investments and exports for the two countries. In addition, economic development and capital accumulation in an economy seem to have just as much of an influence on exports as exports have on capital accumulation and economic development.     

经济危机与可持续发展——第十二届全国政治经济学研讨会学术观点综述

第十二届全国政治经济学研讨会讨论了＂经济危机与可持续发展＂的问题,主要包括经济危机的成因研究、经济危机的影响研究、经济危机与宏观调控、经济危机的治理思路、应对危机的经验研究和可持续发展等。     

金融危机动荡下的甘肃经济稳定与发展

2008年由美国次贷危机引发的金融危机已全面蔓延,渗透到各个经济领域和经济区域,甘肃经济也同样受到金融危机的;中击。面对金融危机,首先要保持经济稳定、社会稳定,与此同时应充分利用国家政策,发挥政府在金融危机中的主导作用,甘肃经济发展的也应遵循这一原则和路径。甘肃经济在此次金融危机中挑战与机遇并存,甘肃省要充分利用金融危机中国家的相关政策,加快甘肃基础设施建设,调整产业结构,实现甘肃经济的稳定与发展。     

Neoliberal growth models,monetary union and the Euro crisis. A post-Keynesian perspective

The paper offers an account of the Euro crisis based on post-Keynesian monetary theory and its typology of demand regimes. Neoliberalism has transformed social and financial relations in Europe but it has not given rise to a sustained profit-led growth process. Instead, growth has relied either on financial bubbles and rising household debt (‘debt-driven growth’) or on net exports (‘export-driven growth’). In Europe the financial crisis has been amplified by an economic policy architecture (the Stability and Growth Pact) that aimed at restricting the role of fiscal policy and monetary policy. This neoliberal economic policy regime in conjunction with the separation of monetary and fiscal spheres has turned the financial crisis of 2007 into a sovereign debt crisis in southern Europe.     

The impact of labour reallocation and competitive pressure on TFP growth: firm‐level evidence from crisis and transition ridden Bulgaria

This article uses the experiment of a macro‐financial crisis and radical liberalization in Bulgaria to explore the impact of labour reallocation and competitive pressure on Total Factor Productivity (TFP) growth in the manufacturing sector. Our results indicate that labour reallocated from less efficient to more efficient firms in virtually all industries but the influence of other within industry characteristics on TFP growth was significantly higher than the impact of between industry characteristics. Furthermore, while increased competitive pressure had a positive impact on TFP growth among relative laggards in the respective industries, this impact was more than overwhelmed by the inability of industrial leaders to leapfrog their competitors. This result is inconsistent with evidence from developed industrialized economies, but similar to that of less developed countries marked by credit crunch and institutional failure. It has potentially important policy implications.     

斯大林的资本主义经济危机理论探析

当世界各国正从美国次贷危机引发的世界性经济危机中探索出路、找寻对策时,也在对危机的爆发缘由进行积极的思考和多种的解读,重新梳理和评价斯大林的资本主义经济危机理论,即资本主义经济危机是生产过剩的危机;资本主义经济危机是毁灭性的周期性危机;资本主义经济危机是资本主义制度的必然产物等等,这对探讨、洞析和应对当前世界性的经济危机毫无疑义具有重要理论和现实意义。     

论《资本论》及其手稿中的经济危机理论的整体性

《资本论》及其手稿的经济危机理论是对资本运动规律的一种整体分析,具有揭示资本主义经济危机实质的整体性结构。社会主义运动一百多年的发展,不论是高潮还是低谷,大部分都源于《资本论》及其手稿经济危机整体性理论或涉及这个理论,富于战斗精神的几代人在《资本论》及其手稿的经济危机整体性理论中发现了武器,这个武器在反对资本主义和克服经济危机的战斗中总是发挥着巨大指导力量。《资本论》及其手稿经济危机整体性理论,不但直面资本主义市场经济中的问题,而且以独特视角全面分析西方金融危机和债务危机问题。把对西方金融危机和债务危机产生原因的分析,建立在《资本论》及其手稿的经济危机整体性理论的基础上,提出了应对危机的科学方法。     

An investigation into the credibility of currency board arrangements in Bosnia and Herzegovina and Bulgaria

Currency Boards are usually argued to increase the credibility of the monetary authority, although this effect ultimately depends on the economic, political and institutional circumstances in the specific country. Few studies have previously been able to address this issue empirically. Using a novel database, the analysis conducted in this paper finds that, other things being equal, the credibility of the monetary authority is likely to be higher in those European transition countries with currency board arrangements, namely Bosnia and Herzegovina and Bulgaria. The results also suggest that currency board arrangements are more likely to increase the credibility of the monetary authority in countries with a low level of trust in government and a weak economy. These findings imply that the maintenance of currency board arrangements in recent years in Bosnia and Herzegovina and Bulgaria may have been advantageous.     

Impact of FDI in the Fiscal Adjustment Process

Economic history, particularly the history of the Eurozone, is full of cases of countries experiencing severe economic crises. These crises may have different causes and effects and may be transmitted differently among the affected countries. However, the type of crisis that has the most widely spread political, economic, and social impact is the recession crisis. As a rule of thumb, a recession crisis is the result of a separate crisis, such as a country’s debt crisis (e.g. Greece, Portugal and Spain), a financial and banking crisis, or a crisis due to various bubbles (e.g. the real estate crisis in the United States). The main purpose of this paper is to study the course of a series of countries, which were or currently are in a crisis and a supervised adjustment program, in terms of managing the exit from the crisis, the implementation of macroeconomic and reform policies, the policy applied for attracting foreign direct investments, and the impact of such policy on the countries that were affected by the crisis.     

债务危机:困境、根源及其解决机制——发展中国家与发达国家的比较分析

债务危机在全球化时代成为愈益常见的经济现象,它不仅发生在经济相对落后的发展中国家,也发生在经济较为发达的发达国家。那么引致债务危机的根源究竟在于世界经济发展的必然因素还是偶然因素,本文对此展开剖析。文章认为,金融资本主义的全球影响、虚拟经济超越实体经济以及国际和国内经济环境的复杂多变是引发债务危机的重要因素,而经济、政治和社会三位一体的政策选择则是解决债务危机的根本之道。     

Economic policy uncertainty and economic activity in Turkey

We construct economic policy uncertainty (EPU) index for Turkey based on newspaper coverage frequency. The EPU index reflects the frequency counts of articles in major Turkish newspapers that contain specific terms related to economy, policy and uncertainty. The EPU index rises around national elections (2002, 2007 and 2015), domestic uncertainty periods (2008 and 2013), domestic and global financial crisis periods (2001 and 2009) and the Euro area debt crisis in 2011. The investigation of the impact of EPU on economic activity reveals that policy uncertainty has adverse impacts on economic growth, consumption and investment in Turkey. Remarkable is that high uncertainty leads to a greater investment decline than output and consumption.     

Fresh surface water resource allocation between Bulgaria and Greece

This paper addresses the important issue of transboundary sharing of fresh surface water resources, including quantity and quality dimensions. It carves a simple economic model of the benefits which can be generated by maximizing the joint profits earned, when the resource is shared efficiently between two countries. The appropriate policy instrument towards this end is a bilateral agreement to charge the same water price to all water users in a given sector. Market clearance will then follow to determine the optimal water price. The case of the Nestos river flowing through Bulgaria and Greece, but overexploited by Bulgaria, in the Balkans is used as a case study. The empirical estimation of a fixed proportions production function for corn derives a marginal water value of the Nestos water for Greece. This value, which applies under the current non-cooperative solution, is higher than the optimal water price in the cooperative solution.