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Business Cycle Synchronization Between the Bulgarian Economy and the European Union

Author

Listed:
  • Atanas Damyanov

    ("D.Tsenov" Academy of Economics)

  • Galin Stefanov

    ("D.Tsenov" Academy of Economics)

Abstract

This paper analyzes the level of economic convergence within the EU and in particular within the EMU. The main purpose is to assess the level of business cycle synchronization between Bulgaria and the Eurozone. The research is conducted with data for the period 1995-2009 divided into two subsamples: 1995-2001 and 2002-2009. Business cycles are identified through detrending of GDP time series with Baxter-King and Hodrick-Prescott filters. The empirical results of this paper reveal that in the period 1995-2002 Bulgaria did not form an Optimum Currency Area with any of the EMU members and possibly suffered severe negative effects from the introduction ofthe Currency Board in 1997. The findings forthe second sub-period 2002-2009 suggest that the introduction of the Euro in Bulgaria will be highly beneficial because of the high level of synchronization of its business cycle fluctuations with the Eurozone.

Suggested Citation

  • Atanas Damyanov & Galin Stefanov, 2010. "Business Cycle Synchronization Between the Bulgarian Economy and the European Union," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 8(2), pages 171-185.
    • Handle: RePEc:seb:journl:v:8:y:2010:i:2:p:171-185
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    Citations

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    Cited by:

    1. Ivan Todorov, 2012. "Macroeconomic Specifics of Integration of Bulgaria into the European Union," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 4, pages 24-46.
    2. Ivan Todorov, 2012. "European Economic Integration Theories and Criteria," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 131-152.
    3. Sofia Gouveia, 2014. "Business cycle correlation between the Euro area and the Balkan countries," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Democritus University of Thrace (DUTH), Kavala Campus, Greece, vol. 7(1), pages 33-49, April.
    4. Saša Obradović & Vladimir Mihajlović, 2013. "Synchronization of Business Cycles in the Selected European Countries," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 60(6), pages 759-773, December.
    5. Kalina Durova, 2019. "Are the New Member States Ready to Join the Euro Area? A Business Cycle Perspective," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 3, pages 72-95.
    6. Ivan Todorov & Aleksandar Aleksandrov & Kalina Durova, 2018. "Future Euro Area Membership Of Bulgaria In Terms Of The Business Cycle," Economic Archive, D. A. Tsenov Academy of Economics, Svishtov, Bulgaria, issue 4 Year 20, pages 3-14.

    More about this item

    Keywords

    Business cycle synchronization; EU integration; Currency unions; Optimum currency area; Economic development; Economic convergence;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General

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