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Long-term Consumer Price Dynamics in Bulgaria, 1750–2020

Author

Listed:
  • Martin Ivanov

    (Sofia University, Bulgaria)

  • Kaloyan Ganev

    (Sofia University, Bulgaria)

  • Ralitsa Simeonova-Ganeva

    (Sofia University, Bulgaria)

Abstract

In this paper we explore the long-term developments of consumer prices in Bulgaria for the period 1750–2020. The discussion draws on a component-based index of consumer prices constructed by the authors. We consider both nominal price-level time series and real prices of selected essentials (bread, meat, sugar, tobacco, alcohol, and construction goods used by households). For the reviewed period, we identify two major inflationary episodes, namely the two World Wars and the interwar period, and the period of post-communist transition. For the former, we compute an increase of the price level of about 46 times. For the latter, we arrive at a mind-blowing analogical result of over 3800 times. A curious finding concerns the communist period. Contrary to popular beliefs established through a massive propaganda of no-inflation socialist economies, we discover an overall increase of the price level for that period of nearly 4 times. Real prices of individual commodities are calculated by deflating nominal figures by the value of the corresponding base consumer price index. The inspection of their dynamics leads to uncovering hidden insight related to the developments of specific markets. Also, it allows to assess more clearly the similarities and differences of real price evolutions over different political regimes. For example, we find that the real price of bread in the times of communist rule did not contrast markedly with its levels in preceding and succeeding periods. Another example points to the conclusion that in the years of EU membership, the real prices of most commodities that we consider follow a path of decline. This suggests that statements on the economic developments in those years which rely heavily on the popular perception of lower affordability should at least be taken with a grain of salt. The availability of our results could facilitate further explorations into the nature and specifics of the economic and social development of Bulgaria over a long period of time.

Suggested Citation

  • Martin Ivanov & Kaloyan Ganev & Ralitsa Simeonova-Ganeva, 2022. "Long-term Consumer Price Dynamics in Bulgaria, 1750–2020," Proceedings of the Centre for Economic History Research, Centre for Economic History Research, vol. 7, pages 23-39, November.
    • Handle: RePEc:ceh:journl:y:2022:v:7:p:23-39
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    References listed on IDEAS

    as
    1. Jose A Lopez & Kris James Mitchener, 2021. "Uncertainty and Hyperinflation: European Inflation Dynamics after World War I [Modeling and forecasting realized volatility]," The Economic Journal, Royal Economic Society, vol. 131(633), pages 450-475.
    2. Rodney Edvinsson & Johan Söderberg, 2011. "A Consumer Price Index For Sweden, 1290–2008," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 57(2), pages 270-292, June.
    3. Lampe, John R., 1975. "Varieties of Unsuccessful Industrialization: The Balkan States Before 1914," The Journal of Economic History, Cambridge University Press, vol. 35(1), pages 56-85, March.
    4. Jan Tore Klovland, 2014. "New methods for construction of historical price indices, with an illustration from Norway, 1777–1920," European Review of Economic History, European Historical Economics Society, vol. 18(3), pages 277-305.
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    More about this item

    Keywords

    inflation; real prices; long-term price dynamics; Ottoman Empire; World Wars; communism; transition; Bulgaria;
    All these keywords.

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • N33 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Europe: Pre-1913
    • N34 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Europe: 1913-
    • P22 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Prices

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