IMPACT OF EXTERNAL SHOCKS ON BULGARIA’S GROWTH AND CYCLE
​
​Ivan Todorov
South-West University “Neofit Rilski”, 66 Ivan Mihaylov Street, 2700 Blagoevgrad, Bulgaria
Stoyan Tanchev
South-West University “Neofit Rilski”, 66 Ivan Mihaylov Street, 2700 Blagoevgrad, Bulgaria
Petar Yurukov
South-West University “Neofit Rilski”, Faculty of Economics, 66 Ivan Mihaylov Street, 2700 Blagoevgrad, Bulgaria

DOI:   ​​doi.org/10.31410/Balkans.JETSS.2019.2.2.158-168

Balkans Journal of Emerging Trends in Social Sciences, (2019) , Vol 2, No 2
ISSN: 2620-164X

Abstract:    The objective of this paper is to study the influence of the international economic conjuncture on Bulgaria’s economic growth and business cycle. A vector autoregression (VAR) is employed to identify the main factors, which affect the growth and cyclicality of Bulgaria, the size and the direction of their impact. The cause-and-effect links between external economic conditions, the growth of real gross domestic product (GDP) and the output gap of Bulgaria have been investigated. The external opportunities and threats facing the Bulgarian economy under a currency board arrangement and a membership in the European Union have been outlined. Recommendations have been made on appropriate policies for using external opportunities and overcoming external threats. The study results indicate that the main international determinants of Bulgaria’s economic growth and business cycle are macroeconomic policies in the Euro Area.

Keywords:   Bulgaria; External shocks; Economic growth; Business cycle; Currency board arrangement;  Vector autoregression

JEL Classifications O47 · E32 · F41 · F43 · F44

 REFERENCES
​

• Damyanov, A. & Stefanov, G. (2010). Business Cycle Synchronization between the Bulgarian Economy and the European Union. South-Eastern Journal of Economics, 8(2), 171-186.
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