{"title":"The currency board in Bulgaria and its impact on sectoral economic activity","authors":"Nikolay Peykov","doi":"10.47743/ejes-2022-0106","DOIUrl":null,"url":null,"abstract":"This paper investigates the impulse reaction of five economic sectors to various monetary policy shocks under the currency board regime in Bulgaria. For that purpose, we have estimated five reduced form VAR models with quarterly data over the period 2001Q1 to 2019Q4 for the sectors of agriculture, manufacturing; construction; real estate, and trade, transport and accommodation activities. The relevant impulse response functions represent three monetary transmission channels, in particular via the overnight interbank market rate, the consumer price index and the real effective exchange rate. We found that there is strong heterogeneity between sectors response to the different monetary policy shocks even under a currency board regime. The differences in the reaction are both in terms of depth, direction and duration. The monetary policy has strong positive impact on construction, and to a lesser extent on manufacturing. The response of the agriculture; trade, transport and accommodation activities is rather negative especially in the long term.","PeriodicalId":43713,"journal":{"name":"Eastern Journal of European Studies","volume":null,"pages":null},"PeriodicalIF":0.7000,"publicationDate":"2022-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"2","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Eastern Journal of European Studies","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.47743/ejes-2022-0106","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"AREA STUDIES","Score":null,"Total":0}
引用次数: 2
Abstract
This paper investigates the impulse reaction of five economic sectors to various monetary policy shocks under the currency board regime in Bulgaria. For that purpose, we have estimated five reduced form VAR models with quarterly data over the period 2001Q1 to 2019Q4 for the sectors of agriculture, manufacturing; construction; real estate, and trade, transport and accommodation activities. The relevant impulse response functions represent three monetary transmission channels, in particular via the overnight interbank market rate, the consumer price index and the real effective exchange rate. We found that there is strong heterogeneity between sectors response to the different monetary policy shocks even under a currency board regime. The differences in the reaction are both in terms of depth, direction and duration. The monetary policy has strong positive impact on construction, and to a lesser extent on manufacturing. The response of the agriculture; trade, transport and accommodation activities is rather negative especially in the long term.
期刊介绍:
The Eastern Journal of European Studies (EJES) seeks to provide a forum for multidisciplinary and interdisciplinary dialogue between ideas, and a framework for theoretical and empirical analyses covering major topics in European studies: European history, politics, European economy and European policies, EU community law, European culture and society. EJES encourages studies focusing on Central and Eastern Europe (including Eastern Neighbourhood) in order to better understand its transformations induced by the integration process and to address its specific challenges by supporting scientific debates on the general European theory and practice. Furthermore, the editorial board regularly invites distinguished guest editors to coordinate thematic issues.