Some New Insights into Monetary Transmission Mechanism in Bulgaria

Minea, Alexandru; Rault, Christophe

doi:2009.24.3.563

The Journal of Economic Integration 2009 September;24(3) :563-595.
DOI: https://doi.org/10.11130/jei.2009.24.3.563

Some New Insights into Monetary Transmission Mechanism in Bulgaria

Alexandru Minea, Christophe Rault,

University of Auvergne
University of Orléans

ABSTRACT

The presence of a Currency Board (CB) monetary system in Bulgaria is a key factor in assessing monetary policy transmission. Using a generalized impulse response analysis, we propose evidence based on the estimation of VAR models supporting the endogeneity of main Bulgarian monetary aggregates, in response to shocks on the ECB interest rate. These results, together with the analysis of the behavior of real variables, shed a new perspective on the CB functioning of Bulgaria.

JEL Classification: C52, E42, E52

Keywords: currency board | monetary policy | VAR | Bulgaria | GIRF

REFERENCE

1.	Babich, V.(2001), "Monetary Transmission in Latvia", Baltic Economic Trends, 2, pp.16-27.

2.	Bems, R.(2001), "The Monetary Transmission Mechanisms in the Baltic States: Introduction", Baltic Economic Trends, 2, pp.3-6.