We show that in a exogenous growth model with Epstein-Zin (1989, 1991) recursive preferences calibrated to Bulgarian data under the progressive taxation regime (1993- 2007), the economy exhibits equilibrium indeterminacy. These results are in line with the fi ndings in Benhabib and Farmer (1994,...

Motivated by recent debates on the possible role of wages as an income policy tool, in this study we examine the dynamic inter-relationship between wages in Bulgaria, mainly in the context of its EU accession. Relative to the WDN studies on the other EU member states, the novelty in this paper...

We introduce "fair" wages in a general-equilibrium model where worker's effort is unobservable and investigate whether such a mechanism can quantitatively account for the degree of real wage rigidity in the Bulgarian labor markets, as documented in Lozev, Vladova, and Paskaleva (2011) and...

This paper assesses key aspects of Bulgaria’s competitiveness. The behavior of a variety of a real exchange rate indicators and export performance is also examined in this study. The Balassa–Samuelson effect refers to the impact of differential productivity growth rates in the tradables and...

This paper focuses on the process leading to the choice of a currency board as a stabilization instrument, and its specific design. The use of a currency board was complicated and controversial because of serious structural problems, including a systemic banking crisis. It argues that the...

In 1999, Executive Board deliberations on Bulgaria focused on the need for the authorities to persevere with structural reform. Under the currency board arrangement introduced in mid-1997, Bulgaria has achieved macroeconomic stabilization and made substantial progress in structural reform....

This Selected Issues paper and Statistical Appendix analyzes the reasons behind the relatively low rates of savings in Bulgaria and prospects for their evolution over the medium term. The paper argues that low saving rates largely reflect the current stage of transition—characterized by still...