How Quantitatively Important are the Shocks to Capital Depreciation Rate for Business Cycle Fluctuations? Lessons for Bulgaria (1999-2019)

Vasilev, Aleksandar (2021) How Quantitatively Important are the Shocks to Capital Depreciation Rate for Business Cycle Fluctuations? Lessons for Bulgaria (1999-2019). In: Advances in Business and Management. NOVA Science Publishers. ISBN 9781685071738

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How Quantitatively Important are the Shocks to Capital Depreciation Rate for Business Cycle Fluctuations? Lessons for Bulgaria (1999-2019)
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Abstract

Shocks to depreciation rate are introduced into a real-business-cycle setup augmented with a detailed government sector. The model is calibrated to Bulgarian data for the period following the introduction of the currency board arrangement (1999-2019). The quantitative importance of the presence of shocks to the depreciation rate of capital is investigated for the magnitude of cyclical fluctuations in Bulgaria. Despite making hours worked and wages more volatile, the quantitative effect of such a shock is found to be of the wrong magnitude, and thus not an important driving force for the propagation of business cycle fluctuations.

Keywords:business cycles, capital depreciation rate shocks, Bulgaria
Subjects:L Social studies > L130 Macroeconomics
Divisions:Lincoln International Business School
ID Code:47013
Deposited On:25 Oct 2021 14:59

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