Midlands State University Library

Inflation and sectoral output growth variability in Bulgaria/

Khan, Muhammad

Inflation and sectoral output growth variability in Bulgaria/ created by Muhammad Khan - Comparative economic studies Volume 55, number 4 .

This paper analyzes the relationship between inflation and sectoral output growth variability in Bulgaria using a monthly data set from 2000:01 to 2012:08. The Bulgarian economy is working under a unique currency board setting that exclusively allows the government to influence the money supply through its fiscal position on the asset side of the central bank's balance sheet. Abrupt relative price changes across sectors bring fluctuations in sectoral output growth. Nevertheless, inflation effects on average output growth are positive and linear. Besides, persistent real exchange rate appreciation causes lower growth and higher variability under the pegged exchange rate regime.

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Inflation--Currency board--Bulgaria--Output growth

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