22/2021 Soft Monetary Constraint and Shortage
in the European Sovereign Debt Economy.
Insights from J. Kornai’s theory - Updated version
From the fourth quarter of 2007 to the second quarter of 2020, the monetary base
in the euro area grew by 330%, the money supply by 61% and inflation measured by the
consumer price index - only 17%. Interest rates are around zero and negative, inflation is low,
and we often register deflation. This discrepancy between the growth of money and prices
has not only practical dimensions for the ECB and FED monetary policy, but also a theoretical
significance. In this contribution, we propose an interpretation of these trends on the basis of
concepts developed by J. Kornai in his economics of shortage analysis, which we apply to the
sovereign debt market of European countries. The point here is not to transpose Kornai's
shortage economy analysis to European capitalist economies, but to show that similar
phenomena are appearing today in a different institutional context.
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23/2021 Balkan Monetary Dependence
during the XIX and XX centuries
In this article, we look at the main stages of the monetary systems on the Balkans, representing a cyclical alternation of dependent models, each of them effectively serving the relationship of the Balkan peripheral economies with their dominant military, geopolitical and economic centre. This centre of attraction is the anchor against which the monetary regime of the periphery is adjusted. We consider four periods: (i) the building of a national monetary system after long years of Ottoman domination, and especially the accession to the Latin Monetary Union, (ii) the adoption of the rules of the League of Nations and monetary stabilizations based on the gold exchange standard, (iii) the inclusion in the German Lebensraum and the system of currency control and clearings, and finally (iv) the Soviet zone and the COMECON, the mechanism of passive money and the transferable ruble. In the last period we present the Yugoslav monetary regime, which was attached to the West.
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21/2020 The loss of discipline after EU Enlargement: a theoretical note
Michael Dooley (Dooley, 1997; Dooley, 2000) put forward an insurance model (or moral hazard model) of currency crises, which read in the modified Roger Garrison (Garrison, 2001) economic framework gives a good theoretical basis for the explanation of the overall dynamics of the post-communist transformation and especially the loss of discipline after EU accession. The article analyses also the role of monetary regimes (currency anchor) and EU enlargement (political and geostrategic anchor) and their relationships. The article proposes graphical representation and introducing some new concepts such as “insurance possibility frontier”, “market for insurable funds”, etc.
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20/2020 Dependent Monetary Regime. Theoretical foundations
/in Bulgarian/
Това е предварителен вариант на глава трета Dependent Monetary Regime. Theoretical foundations от съвместната книга с Ерик Манин “Diversity of Capitalism in Central and Eastern Europe. Dependent Economies and Monetary Regimes“, която ще излезе 2021 г., издателство Palgrave Macmillan.
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19_BG/2020 ЗА СЕНЬОРАЖА, И ЗА СЕНЬОРАЖА В ЛИВАН
Сеньоражът, неговата величина и начини на изчисление, както и счетоводно му записване, са важна тема в дебата върху финансовата криза в Ливан. Ще се спра, първо, върху някои принципни положения за сеньоража и второ, ще направя коментари, за това, как според мен може да се интерпретират данните за Ливан (базирайки се върху наличната информация и най-вече одита на EY and Deloitte, към края на 2018 г.). Оставам настрана политическите и геополитическите мотиви, които определят структурата на баланса на БдЛ.
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19_EN/2020 COMMENTS ON SEIGNIORAGE IN LEBANON
The seigniorage (money income), its size and methods of calculation, as well as its accounting, are an important topic in the debate on the financial crisis in Lebanon. We will focus, firstly, on some principles of seigniorage, and secondly, on how we think the Lebanese data can be interpreted (based on the EY and Deloitte audit, for the end of 2018). We leave aside the political and geopolitical motives that determine the structure of the balance sheet of the Banque de Liban (BdL).
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19_FR/2020 COMMENTAIRES SUR SEIGNIORAGE AU LIBAN
Le seigneuriage (revenu monétaire), sa taille et ses méthodes de calcul, ainsi que sa comptabilité, sont un sujet important dans le débat sur la crise financière au Liban. Ici, nous nous concentrerons, premièrement, sur certains principes du seigneuriage et, deuxièmement, sur la manière dont nous pensons que les données libanaises peuvent être interprétées (tout cela sur la base de l'audit de EY et Deloitte, pour la fin 2018). Nous laissons de côté les motifs politiques et géopolitiques qui déterminent la structure et les mouvements du bilan de la Banque du Liban (BdL).
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13/2017 Reflections on Currency Boards and Monetary Federalism (Book review in Bulgarian and English)
The book of Hadrien Saiag (HS) took me back to memories, exactly twenty years ago. In 1996 Bulgaria went through a deep financial crisis and hyperinflation, and in mid-1997 introduced the Currency Board similarly to Argentina in 1991. The introduction of the Currency Board coincided with the outset of my research career in the Bulgarian Central Bank. During that period our attention was focused entirely on the new radically changed monetary system. I as well as most Bulgarian economists considered that the introduction of the Currency Board was the right decision providing the fresh onset of a strict monetary order, clear rules and suspension the vicious practices of uncontrolled and bandit accumulation of debts and their consistent monetization through the emission of money. Argentina and its monetary system was a model to be followed and in a sense admired. Domingo Cavallo was a hero while a number of Argentinian economists visited Bulgaria and explained the operation and effects of the Currency Board and the Convertibility Law. I remember Cavallo’s article entitled "The Quality of Money" (1999)[1], which I discussed with my students. I particularly liked that Cavallo began his arguments with the sentence "Money Is an Institution".
[1] This article was Cavallo’s speech on the occasion of his being awarded the honorary degree of Doctor Honoris Causa of the University of Paris, Sorbonne.
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10/2016 Monetary Regimes and EU Accession:Comparing Bulgaria and Romania
This paper traces the origins of the different monetary regimes adopted in Bulgaria and Romania in 1996- 97 and examines their performance during the EU accession. The findings indicate that the constraints of the currency board in Bulgaria shifted economic activity towards the private sector, while the discretionary policies in Romania turned public finances into both a contributor and a response mechanism to economic imbalances. While the prospects of EU accession initially enhanced the performance of the monetary anchors, the implicit insurance of EU membership increased moral hazard and led to a rapid rise in private and public debt. The paper also explores the historical parallels between the monetary regimes of Bulgaria and Romania in 1996-97 and 1925-1940.
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4/2016 Inflation Uncertainty, Output Growth Uncertainty and Macroeconomic Performance:Comparing Alternative Exchange Rate Regimes in Eastern Europe
In the late 90's, after severe financial and economic crisis, accompanied by inflation and
exchange rate instability, Eastern Europe emerged into two groups of countries with
radically contrasting monetary regimes (Currency Boards and Inflation targeting). The task of our
study is to compare econometrically the performance of these two regimes in terms of
the relationship between inflation, output growth, nominal and real uncertainties from 2000 till now.
In other words, we test the hypothesis of non-neutrality of monetary and exchange rate regimes
with respect to these connections. In a whole, the empirical results do not allow us to judge which
monetary regime is more appropriate and reasonable to assume. EU enlargement is one of the
possible explanations for the numbing of the differences and the lack of coherence between the two
regimes in terms of inflation, growth and their uncertainties.
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