Business cycles in Bulgaria and the Baltic countries: an RBC approach

Vasilev, Aleksandar (2009) Business cycles in Bulgaria and the Baltic countries: an RBC approach. International Journal of Computational Economics and Econometrics, 1 (2). p. 148. ISSN 1757-1170

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Abstract

This paper explores the business cycle in Bulgaria and the Baltic
countries: Estonia, Latvia and Lithuania during the 1993–2005 period. The
paper aims at deepening the understanding of the nature of output fluctuations.
The neoclassical approach will be employed, much in the spirit of the real
business cycle (RBC) literature, which gives a general equilibrium picture of
the transition process. The model used in this paper follows the methodology of
King et al. (1988). Both the model and data series show that the major drop in
output was due to productivity. In addition, the timing of the banking reforms
coincides with the improvement of economic performance. This is a strong
indication that banking regulations in place were crucial for the output
performance throughout the period in Bulgaria and the Baltic countries, a
finding that has important implications for economic policy.

Keywords:business cycles; productivity; Baltic countries; Bulgaria
Subjects:L Social studies > L130 Macroeconomics
L Social studies > L110 Applied Economics
Divisions:Lincoln International Business School
ID Code:33196
Deposited On:25 Oct 2018 13:45

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