Some New Insights into Currency Boards: Evidence from Bulgaria
Université d'Auvergne - Clermont 1
University of Orleans; Université d'Évry - Centre D'Etudes des Politiques Economiques et de L'Emploi (EPEE); Université Paris I Panthéon-Sorbonne - Equipe Universitaire de Recherche en Economie Quantitative (EUREQUA); Institute for the Study of Labor (IZA); CESifo (Center for Economic Studies and Ifo Institute)
William Davidson Institute Working Paper No. 903
The presence of a Currency Board (CB) monetary system in Bulgaria is a key factor in assessing monetary policy transmission, since a CB implies no monetary autonomy. Using the SVAR technique according to the statistical properties of macroeconomic time series, we propose evidence sustaining the endogeneity of main Bulgarian monetary aggregates to shocks on the ECB interest rate. These results shed a new perspective over CB functioning.
Number of Pages in PDF File: 24
Keywords: Currency Board, monetary policy, SVAR, Bulgaria
JEL Classification: E42, E52
Date posted: June 10, 2008
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