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How Fiscal Policy in Bulgaria may Affect the Transition to a Low Carbon Economy?

Author

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  • Dimitar Zlatinov

    (Sofia University St. Kliment Ohridski)

Abstract

The adaptation of traditional macroeconomic policy goals to new ecological realities assigns a specific role to macroeconomic policy. We model the short-run transmission mechanism of fiscal policy under Currency Board Arrangements in Bulgaria in order to assess the fiscal policy potential to boost sustainable economic development and compensate for the economic growth losses due to decarbonisation of the economy. We find that fiscal policy instruments in Bulgaria have no statistically significant effect on GDP components considered separately but they do have a complex effect on macroeconomic environment in the country. This indicates that specific fiscal policy effects to support the transition to a low-carbon economy in Bulgaria cannot be expected and the structural policies should be followed.

Suggested Citation

  • Dimitar Zlatinov, 2020. "How Fiscal Policy in Bulgaria may Affect the Transition to a Low Carbon Economy?," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 4, pages 525-535, December.
    • Handle: RePEc:nwe:eajour:y:2020:i:4:p:525-535
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    References listed on IDEAS

    as
    1. Barro, Robert J, 1974. "Are Government Bonds Net Wealth?," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1095-1117, Nov.-Dec..
    2. Ms. Selma Mahfouz & Mr. Richard Hemming & Mr. Michael Kell, 2002. "The Effectiveness of Fiscal Policy in Stimulating Economic Activity: A Review of the Literature," IMF Working Papers 2002/208, International Monetary Fund.
    3. Böhringer, Christoph & Rutherford, Thomas F., 2013. "Transition towards a low carbon economy: A computable general equilibrium analysis for Poland," Energy Policy, Elsevier, vol. 55(C), pages 16-26.
    4. Asafu-Adjaye, John & Mahadevan, Renuka, 2013. "Implications of CO2 reduction policies for a high carbon emitting economy," Energy Economics, Elsevier, vol. 38(C), pages 32-41.
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    Cited by:

    1. Iana Paliova, 2024. "Challenges of Bulgaria‘s Fiscal Policy towards Green Transition in the European Union," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 27-49.

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    More about this item

    Keywords

    fiscal policy; transition to a low-carbon economy; Currency Board Arrangements;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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