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Supply-Side Factors of Economic Growth in Bulgaria

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  • Ivan Todorov

    (South-West University "Neofit Rilski", Bulgaria)

Abstract

The present article discusses five equilibrium approaches to estimating elasticities in Bulgaria’s aggregate production function. The study has two objectives: first, to identify the best equilibrium approach to determining elasticity in Bulgaria’s aggregate production function; and second, to measure quantitatively the contributions of capital, labor and total factor productivity to Bulgaria’s economic growth under a currency board arrangement (CBA). An econometric procedure - ordinary least squares (OLS) estimation of Bulgaria’s aggregate production function with annual and quarterly data - has been used to select the best equilibrium approach to determining elasticities in this function. The OLS estimation has demonstrated that the first equilibrium approach, which is based on the final expenditure structure of Bulgaria’s gross domestic product (GDP), provides the most reliable results of all five equilibrium approaches. The second objective of the research has been accomplished by applying the growth accounting (GA) technique to Bulgaria for the period 1997-2013. The GA results imply total factor productivity and capital stock have been the main supply-side determinants of Bulgaria’s economic growth under a CBA, while employment has had an insignificant negative impact on growth.

Suggested Citation

  • Ivan Todorov, 2016. "Supply-Side Factors of Economic Growth in Bulgaria," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 2, pages 159-174, June.
    • Handle: RePEc:nwe:eajour:y:2016:i:2:p:159-174
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    References listed on IDEAS

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    Cited by:

    1. Cătălina MOTOFEI, 2017. "Vectors of economic growth in the eastern area of the EU," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(1(610), S), pages 215-226, Spring.
    2. Kalina Durova, 2018. "Long-Term Impact of the European Funds on Bulgaria's Economy," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 3, pages 325-333, September.
    3. Goce Petreski & Darko Lazarov, 2017. "Drivers of Economic Growth: A Comparative Analysis of Macedonia and Bulgaria," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 6, pages 3-16.
    4. Cătălina MOTOFEI, 2017. "Vectors of economic growth in the eastern area of the EU," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(1(610), S), pages 215-226, Spring.

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    More about this item

    Keywords

    Bulgaria; economic growth; currency board arrangement;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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