Some New Insights into Currency Boards: Evidence from Bulgaria
24 Pages Posted: 10 Jun 2008
Date Written: January 2008
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.
Keywords: Currency Board, monetary policy, SVAR, Bulgaria
JEL Classification: E42, E52
Suggested Citation: Suggested Citation