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Some New Insights into Currency Boards: Evidence from Bulgaria

24 Pages Posted: 10 Jun 2008  

Alexandru Minea

Université d'Auvergne - Clermont 1

Christophe Rault

University of Orleans; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: January 2008

Abstract

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

Minea, Alexandru and Rault, Christophe, Some New Insights into Currency Boards: Evidence from Bulgaria (January 2008). William Davidson Institute Working Paper No. 903. Available at SSRN: https://ssrn.com/abstract=1140774 or http://dx.doi.org/10.2139/ssrn.1140774

Alexandru Minea

Université d'Auvergne - Clermont 1 ( email )

Clermont-Ferrand
France

Christophe Rault (Contact Author)

University of Orleans

Rue de Blois
BP 6739
LEO, Orleans, Orleans cedex 2 45067
France

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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