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Exchange-Rate Regimes on the Path to Euro
Abstract
An attempt is made to outline the role and importance of exchange rate regimes on the way to the Euro. The differences between the concepts “currency regime” and “exchange rate regime” are clarified. The types of currency regimes and exchange rate regimes are systematized. The relationships of exchange rate regime with macroeconomic tools and the Balance of Payments are analyzed. The specificity of choosing an exchange rate regime is revealed. The impact of exchange rate regimes on the economies of the new member states is highlighted. The Bulgarian currency board arrangement is reviewed in the context of the future membership of Bulgaria in the Euro area.
... During the integration process the importance of national exchange rate policy gradually decreases and disappears completely when the country joins a currency area. The type of the exchange rate regime has a specific impact on the effectiveness of macroeconomic policies and on the integration of the national economy in economic and monetary unions (Todorov, 2014). ...
... During the integration process the importance of national exchange rate policy gradually decreases and disappears completely when the country joins a currency area. The type of the exchange rate regime has a specific impact on the effectiveness of macroeconomic policies and on the integration of the national economy in economic and monetary unions (Todorov, 2014). ...
The present research has two objectives: first, to study the short-term and the long-term economic growth of Bulgaria under a currency board arrangement and second, to identify the main sources of this growth on the demand-side and on the supply-side of the economy. The empirical research on Bulgaria’s economic growth during the transition to a market-oriented economy has been systematized. The dynamics of the final-expenditure-structure of GDP as a determinant of short-run economic growth on the demand-side of the economy has been analyzed. The trends in the movements of the long-run factors of growth (saving rate, rate of productivity growth, rate of population growth, employment and investment) have been investigated. The growth accounting techniques has been employed to identify the main growth determinants on the supply-side of the economy and to measure quantitatively their contributions to the growth of real GDP. Advisable macroeconomic policies to overcome the heavy growth problems of the Bulgarian economy have been formulated.
... in Bulgaria's GDP compared to EU levels, the supply-side prospects of Bulgaria's economic growth cannot be good. Other factor such as the low saving rate, stagnant domestic consumption and investment, underdeveloped financial markets and the real appreciation of the Bulgarian lev(Todorov, 2014a) may make the growth perspectives of the Bulgarian economy even worse. 13. ...
The objective of this paper is to identify the contributions of capital stock, labor input and
technological progress to Bulgaria’s economic growth under a Currency Board Arrangement. In
order to accomplish the goal of the article, a growth accounting approach based on a two-factor
Cobb-Douglas production function is employed. The results obtained imply that the total factor
productivity and capital stock have been the main supply-side determinants of economic growth
in Bulgaria under a CBA while the influence of changes in employment on the dynamics of real
GDP has been weaker than the influence of the other two factors. The dynamics of the total factor
productivity under a CBA has been rather chaotic, which is a result of the inconsistent
development of the transition to a market-oriented economy in Bulgaria. The growth problems of
Bulgarian economy are complex and difficult to solve. Their successful resolution requires a
combination of short-term measures to stimulate aggregate demand and long-term actions to
affect aggregate supply.
The monograph analyzes the economic growth and the business cycle of Bulgaria under a currency board arrangement as well as the impact of the European Union Cohesion policy on the Bulgarian economy.
