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Money demand during hyperinflation and stabilization: Bulgaria, 1991-2000

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  • Stefka Slavova

Abstract

The demand for money in Bulgaria is estimated over a ten-year period (1991-2000) of high inflation and inflation uncertainty. The paper distinguishes between three well-defined sub-periods: high, variable, but not systematically accelerating inflation from 1991 until April 1996; the near-hyperinflation period from May 1996 to February 1997; and the subsequent stabilization after the adoption of a currency board. The empirical analysis utilizes a standard methodology of cointegration and error correction. The functional determinants of the demand for money change during the different sub-periods. During the hyperinflation episode, Cagan's model is employed.

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  • Stefka Slavova, 2003. "Money demand during hyperinflation and stabilization: Bulgaria, 1991-2000," Applied Economics, Taylor & Francis Journals, vol. 35(11), pages 1303-1316.
    • Handle: RePEc:taf:applec:v:35:y:2003:i:11:p:1303-1316
    DOI: 10.1080/003684032000095398
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    1. Zimbabwe: how to beat hyperinflation
      by Economic Logician in Economic Logic on 2008-07-28 19:13:00

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    Cited by:

    1. Sokic Alexandre, 2012. "The Monetary Analysis of Hyperinflation and the Appropriate Specification of the Demand for Money," German Economic Review, De Gruyter, vol. 13(2), pages 142-160, May.
    2. Aleksandar Vasilev, 2022. "A business cycle model with money-in-utility (MIU) and government sector: the case of Bulgaria (1999–2020)," Journal of Economic and Administrative Sciences, Emerald Group Publishing Limited, vol. 40(5), pages 1205-1217, April.
    3. Melina Dritsaki & Chaido Dritsaki, 2012. "A panel data approach to the demand for money in Bulgaria and Romania," Applied Economics Letters, Taylor & Francis Journals, vol. 19(8), pages 705-710, May.
    4. Boriss Siliverstovs, 2008. "Dynamic modelling of the demand for money in Latvia," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 8(1), pages 53-74, October.
    5. Neven Valev & John Carlson, 2007. "Beliefs about Exchange‐Rate Stability: Survey Evidence from the Currency Board in Bulgaria," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 10(2), pages 111-121.
    6. Sébastien Charles & Jonathan Marie, 2020. "A Note on the Competing Causes of High Inflation in Bulgaria during the 1990s: Money Supply or Exchange Rate?," Review of Political Economy, Taylor & Francis Journals, vol. 32(3), pages 433-443, July.
    7. Sébastien Charles & Jonathan Marie, 2016. "Hyperinflation bulgare de 1997 : transition, fragilité bancaire et change," CEPN Working Papers 2016-13, Centre d'Economie de l'Université de Paris Nord.
    8. Sébastien Charles & Jonathan Marie, 2017. "Bulgaria’s hyperinflation in 1997: transition, banking fragility and foreign exchange," Post-Communist Economies, Taylor & Francis Journals, vol. 29(3), pages 313-335, July.
    9. Boriss Siliverstovs, 2006. "Modelling Demand for Money in Latvia (in Russian)," Quantile, Quantile, issue 1, pages 67-79, September.
    10. Paresh Kumar Narayan, 2010. "Modelling money demand for a panel of eight transitional economies," Applied Economics, Taylor & Francis Journals, vol. 42(25), pages 3293-3305.
    11. Afsin Sahin, 2013. "Estimating Money Demand Function by a Smooth Transition Regression Model: An Evidence for Turkey," Working Papers 791, Economic Research Forum, revised Nov 2013.
    12. SVILOKOS, Tonći, 2016. "Does Economic Crisis Affect The Demand For Money: Evidence From Croatia?," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 20(3), pages 6-27.
    13. Neven T. Valev & John A. Carlson, 2007. "Beliefs about Exchange-Rate Stability: Survey Evidence from the Currency Board in Bulgaria," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 10(2), pages 111-121.

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