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Effects of Business Cycle on Private Consumption in Bulgaria during the Global Financial and Economic Crisis)

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  • Dimitar Zlatinov

Abstract

The paper discusses the patterns of individual consumption in Bulgaria after 2008 and we focus our research on processes in the real sector the crisis amplified or made more resistant. We analyse the structure of household income and expenditures through tracing the dynamics of actual and potential GDP, inflation, actual and equilibrium unemployment, savings and credits of households. The basic conclusions revolve around the significant impact of the business cycle fluctuations on the structure of household income against relatively stable preferences for private consumption which is in line with the permanent income hypothesis and shows low sensitivity of households’ expenditures to the business cycle phase. The considerable increase of household deposits and very low credit activity are also cyclically driven and show that although the real GDP structure in terms of the shares of domestic and external demand is more balanced after 2008 this does not transform into better conditions for doing business and increasing employment.

Suggested Citation

  • Dimitar Zlatinov, 2017. "Effects of Business Cycle on Private Consumption in Bulgaria during the Global Financial and Economic Crisis)," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 4, pages 91-107.
    • Handle: RePEc:bas:econst:y:2017:i:4:p:91-107
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    References listed on IDEAS

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    Cited by:

    1. Bozhidar Nedev, 2019. "Historical roots of behavioural financial thought," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 3, pages 33-50.
    2. Tsvetomir Tsvetkov & Sonya Georgieva, 2022. "Inflation, Inflation Instability and Nominal Uncertainty in Bulgarian Economy," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 8, pages 41-64.

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    More about this item

    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E66 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General Outlook and Conditions

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