The paper examines the main arguments defending and rejecting fixed exchange rate regimes. It argues that, contrary to what is claimed and in line with practice, these types of regimes have more advantages than disadvantages. They make... more
The paper examines the main arguments defending and rejecting fixed exchange rate regimes. It argues that, contrary to what is claimed and in line with practice, these types of regimes have more advantages than disadvantages. They make trade and international coordination significantly more efficient and predictable. Many of the arguments about the loss of degrees of freedom in monetary and macroeconomic policy-making, and the loss of sovereignty, need to be relativised. This is done in this first part of the paper. In the second part, to be published in the next issue, we present different institutional forms that can overcome the problems surrounding fixed exchange rates in different ways, namely currency boards and dollarization, capital controls, and different models of clearing unions.
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During the ten years since the fall of the Berlin Wall and the beginning of the economic reforms in Bulgaria there have been two periods of sharp economic decline and high inflation. The first period of economic disruption was in the... more
During the ten years since the fall of the Berlin Wall and the beginning of the economic reforms in Bulgaria there have been two periods of sharp economic decline and high inflation. The first period of economic disruption was in the early 1990s as the ...
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International audienceForthcomin
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It is often argued that currency boards and the gold standard are alike in that they all obey stringent monetary rules, the two basic features of which are the high credibility of monetary authorities and the existence of an automatic... more
It is often argued that currency boards and the gold standard are alike in that they all obey stringent monetary rules, the two basic features of which are the high credibility of monetary authorities and the existence of an automatic (non-discretionary) adjustment mechanism. This paper presents a comparative analysis of these two types of regimes from the perspective of the sources confidence, namely convertibility, endogeneity, and the international context, and by looking at the operation of the adjustment mechanism, more specifically the financial environment, automaticity, and asymmetry.
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We propose an empirical study analyzing the link between monetary regime (Currency Board) and informal monetary practices (hawala transfers) in Djibouti. The analytical and empirical results both from monetary accounting and econometric... more
We propose an empirical study analyzing the link between monetary regime (Currency Board) and informal monetary practices (hawala transfers) in Djibouti. The analytical and empirical results both from monetary accounting and econometric simulations, particularly from different tests for cointegration between the balance of payments, reserve money, and hawala transfers for the period 2002-2011, show that informal practices develop in harmony with the highly rigid monetary regime. The interaction of formal and informal sector provides a macromonetary balance and stability, thereby perpetuating the regime of Currency Board.
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World War I marked the final point of the continuous process of fiduciarisation of money, of the detachment from its substance, the final point of establishing « Russian type of ideal money ». Paper currency was a Russian tradition, since... more
World War I marked the final point of the continuous process of fiduciarisation of money, of the detachment from its substance, the final point of establishing « Russian type of ideal money ». Paper currency was a Russian tradition, since 1769, until the introduction of the gold standard in 1897. The war brought back the dominance of the paper currency. In this paper, I will consecutively dwell on: (i) the role of paper currency and loans during the war and the discussions among the leading Russian economists as regards the evolution of the monetary regime. I will then examine, (ii) Tugan’s business cycle (conjunctural) theory of the value of money associated with aggregate demand, and especially with the development of the model of money demand and its endogeneity, and finally (iii) on Tugan’s proposals for managed paper currency by controlling the exchange rate.
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This paper contributes to a testament of the conclusions of Manoilescu, the validity of which we test analytically. We develop a model proving that the Manoilescu assumption can be integrated into a Ricardian setting. We find that in some... more
This paper contributes to a testament of the conclusions of Manoilescu, the validity of which we test analytically. We develop a model proving that the Manoilescu assumption can be integrated into a Ricardian setting. We find that in some cases, traditional domestic sectors should be protected, even if the law of comparative advantages suggests another solution.
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The article explores the relationships between capital flight, the monetary regime instability and the general institutional stability of a country, with an empirical application to Djibouti. Are constructed variables for the capital... more
The article explores the relationships between capital flight, the monetary regime instability and the general institutional stability of a country, with an empirical application to Djibouti. Are constructed variables for the capital flight, indicator for the instability of Currency Board and for the stability of institutional settings. This allows in a second time to test statistically and econometrically the impact of capital flight on Currency Board stability. The results show that the Currency Board in the case of Djibouti is entirely determined by capital movements (legal and illegal), unlike other Currency Boards where trade flows play a substantial role. The institutional framework and corrupt practices are also critical to understand the Djibouti monetary equilibrium and the perpetuation of the Currency Board in the presence of unofficial practices.
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Research Interests: Economics and Inequality
L’article cherche a montrer que le regime monetaire particulier a Djibouti, le Currency Board, est un instrument permettant la gestion et la reproduction d’une rente geostrategique par un reseau d'acteurs nationaux (notamment les... more
L’article cherche a montrer que le regime monetaire particulier a Djibouti, le Currency Board, est un instrument permettant la gestion et la reproduction d’une rente geostrategique par un reseau d'acteurs nationaux (notamment les elites locales) et multinationaux (notamment les grandes puissances et les banques). Il defend l'utilisation des concepts theoriques d'espace et emet l'hypothese que l'espace monetaire dans lequel se deploie le Currency Board represente un intermediaire entre les reseaux nationaux et multinationaux. L'article decrit ensuite empiriquement les differents aspects de la rente geostrategique, ainsi que les principaux acteurs nationaux et internationaux. Une lecture historique pourrait s’averer utile pour comprendre les mecanismes de la dynamique des regimes monetaires.
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In the late 90's, after severe financial crisis, accompanied by inflation and exchange rate instability, Eastern Europe emerged into two radically contrasting monetary regimes (Currency Boards and Inflation targeting). The task of our... more
In the late 90's, after severe financial crisis, accompanied by inflation and exchange rate instability, Eastern Europe emerged into two 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 their resilience to the external real and nominal shocks, coming from Euro area. In other words, we test the non-neutrality of exchange rate regimes with respect to these connections. Our PVAR model results reveal that the choice of monetary regimes indeed determines the ability of a country to absorb the external shocks.
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1. European elections and Varoufakis’ book A central question that needs to be addressed to understand the Greek crisis is the process of political transformation in the country. One important indicator of the political consequences of... more
1. European elections and Varoufakis’ book A central question that needs to be addressed to understand the Greek crisis is the process of political transformation in the country. One important indicator of the political consequences of the Euro crisis is the European elections. The results of the elections for the European Parliament were announced on May 26, 2019. Syriza, the ruling party in Greece, obtained less votes than the New Democracy led by Kyriakos Mitsotakis (the son of Konstantino...
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Abstract This paper focuses on Soviet practices and debates on money during the 1918–1921 period. In the first part, we briefly present the Bolshevik policy and discussions on eliminating money as a means of payments and calculation. In... more
Abstract This paper focuses on Soviet practices and debates on money during the 1918–1921 period. In the first part, we briefly present the Bolshevik policy and discussions on eliminating money as a means of payments and calculation. In the second part, we outline in details A. Chayanov's model of in-kind accounting by making some comparisons with O. Neurath’s proposals for an economy in kind. The latter had a decisive influence on Soviet Russia. Finally, we conclude with some reflections on the role of these models for ecological economics, modern efficiency measuring and monetary theory.
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... is valid for second generation CBs. The second parallel task is to check to what extent the interest rate ... With first generation CBs (orthodox CBs) reserve money dynamics is determined entirely by ... The first stage of this... more
... is valid for second generation CBs. The second parallel task is to check to what extent the interest rate ... With first generation CBs (orthodox CBs) reserve money dynamics is determined entirely by ... The first stage of this methodology is the unit root test for the following variables: ...
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The paper presents the evolution of monetary regimes and monetary reforms in the Soviet Union during the period following the seizure of power in October 1917 until the currency reforms carried out by the Soviet authorities in mid-1924.... more
The paper presents the evolution of monetary regimes and monetary reforms in the Soviet Union during the period following the seizure of power in October 1917 until the currency reforms carried out by the Soviet authorities in mid-1924. The studied period gives possibilities for reflection on the “diversity and complexity of monetary practices”, the currency competition and complementarity, the various ways of connecting the different monetary functions (measure, payment, exchange, store of value etc.). Of special interest are the relations between measure (accounting), and exchange (payments), and between large and small currency denominations.
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The main purpose of the study is to present the general dynamics of the Great Depres-sion in Bulgaria, the causes and factors that gave a specific appearance to its manifesta-tion in the country, its phases and forms, as well as the... more
The main purpose of the study is to present the general dynamics of the Great Depres-sion in Bulgaria, the causes and factors that gave a specific appearance to its manifesta-tion in the country, its phases and forms, as well as the subsequent structural change and trajectory of the Bulgarian economy and society. Along with reconstructing the his-torical facts, we have tried to present the history of economic thought and the debates that accompanied them. Without falling into determinism, we argue that the overall dy-namics of the causes, phases and consequences of the Great Depression had an internal logic and causal consistency.
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In the summer of 1931, the Austro-German banking crisis spread to Romania and Bulgaria. In the Romanian case, the management of the crisis confronted three types of protagonists – politicians, bankers and central bankers – and positions... more
In the summer of 1931, the Austro-German banking crisis spread to Romania and Bulgaria. In the Romanian case, the management of the crisis confronted three types of protagonists – politicians, bankers and central bankers – and positions about the relevant attitude to adopt, in particular to avoid or not the Marmorosch Blank Bank bankruptcy. In Bulgaria, the management of the crisis was more consensual. The intervention of the Bulgarian National Bank allowed the refunding of the more important banks, while a further 34 were declared bankrupt and smaller ones silently disappeared. One of the largest banks in Bulgaria, Credit Bank, was rescued. Archive documents, reports of participants and comments from contemporaries, all emphasize the different conceptions of the function of lender of last resort as held by the different protagonists facing this systemic crisis.
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both empirical and theoretical papers on contemporary issues of monetary and economic problem
The main task of the study is to reconstruct the evolution of the agrarian cooperative sector in Bulgaria in the years of communism (1944-1989) from the standpoint of a long-term historical perspective and as a result of the accumulation... more
The main task of the study is to reconstruct the evolution of the agrarian cooperative sector in Bulgaria in the years of communism (1944-1989) from the standpoint of a long-term historical perspective and as a result of the accumulation of two leading institutional transmission mechanisms. The first institutional mechanism is associated with the available institutional inertia being the result of Bulgaria's capitalist past (kind of path dependence), where the cooperative sector and social forms, deeply embedded and rooted among Bulgarians, were put under the government control. The second institutional factor, which determined the image of the cooperative model in Bulgaria under communism, was an external one and was associated with the transfer of the Soviet cooperative agrarian model. Under the communist ideology, the cooperatives were devoid of their original character and were subordinated to the state planned economy.
Research Interests: Communism and Agriculture
This article offers a historical overview of the development of agricultural cooperative credit in the Bulgarian and Serbian lands from the Ottoman era to World War I. Essentially, we present an institutional and comparative analysis of... more
This article offers a historical overview of the development of agricultural cooperative credit in the Bulgarian and Serbian lands from the Ottoman era to World War I. Essentially, we present an institutional and comparative analysis of the genesis, transformation and forms of agricultural cooperative credit over the long term, its driving forces and mechanisms.
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This study analyses bank lending in the larger context of bank-firm relations within the Bulgarian currency board. It focuses on the ‘intersection’ of credit supply and demand on the side of banks and firms simultaneously. We suggest both... more
This study analyses bank lending in the larger context of bank-firm relations within the Bulgarian currency board. It focuses on the ‘intersection’ of credit supply and demand on the side of banks and firms simultaneously. We suggest both traditional and new hypotheses corresponding to the specific conditions of the Bulgarian ownership change, transitional corruption and other institutional and political factors. The cross-section model is based on a survey on Bulgarian banks and authors’ firm-level database. The study found that the dynamics and structure of credit is affected mainly by the features of the institutional environment, whereas the ‘resource’ and traditional factors became secondary. During the period 1998 – 2001, a separation of the banking sector activity from the activity of the real sector in Bulgaria was observed. In the new conditions of currency board, the dual sector of enterprises and the specific institutional environment continue their existence. Despite its...
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In this paper we have proposed an institutional reconstruction of the Bulgarian agricultural cooperatives’ history. The aim was to find the theoretical explanation of the complete deprivation of individuality of the agricultural... more
In this paper we have proposed an institutional reconstruction of the Bulgarian agricultural cooperatives’ history. The aim was to find the theoretical explanation of the complete deprivation of individuality of the agricultural cooperatives in the years of communism and their rejection respectively during the post-communist period. We consider that a relevant explanation was the accumulation of two institutional processes which were related to the nationalization of the cooperative sector and the cooperative idea. The first one may be referred to as being inertial and related to the specificities of the Bulgarian lagging behind and peripheral capitalism from the beginning of 20th century. That capitalism had a state character. The second institutional process occurred mainly in the wake of WWII. It was related to the large scale and actually mechanical application (despite some nominal specificities) of the Soviet model of agriculture and of the communist ideas of the place of that...
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The main goal of this study is to highlight the acceptance, dissemination, interpretation, criticism and make some attempts at contributing to Austrian economics made in Bulgaria during the last 120 years. We consider some of the main... more
The main goal of this study is to highlight the acceptance, dissemination, interpretation, criticism and make some attempts at contributing to Austrian economics made in Bulgaria during the last 120 years. We consider some of the main characteristics of the Austrian school, such as subjectivism and marginalism, as basic components of the economic thought in Bulgaria and as incentives for the development of some original theoretical contributions. Even during the first few years of Communist regime (1944–1989), with its Marxist monopoly over intellectual life, the Austrian school had some impact on the economic thought in the country. Subsequent to the collapse of Communism, there was a sort of a Renaissance and rediscovery of this school. Another contribution of our study is that it illustrates the adaptability and spontaneous evolution of ideas in a different and sometimes hostile environment.