Confidence in the Currency Board in Bulgaria: 1991 - 2003. An initial attempt for calibration (in Bulgarian)
Bulgarian National Bank, Discussion Paper 38/2004
Summary: The goal of this study is to calculate an indicator for the level of credibility of the Bulgarian exchange rate regime. The level of credibility is important in the present debate about whether and how Bulgaria should change it exchange rate regime in the years until the entrance of the country in the Eurozone. The method is based on a simplified money demand model and on calibration of the functional parameters. The result from the calculation is that as of mid-2003 the level of credibility of the Bulgarian exchange rate regime is relatively high and growing relatively quickly. The inference ensuing from this finding is that a change in the present regime based on a currency board arrangement will have a relatively high social cost. To download the paper, which is in Bulgarian, follow the link below.