Effects of the Trilemma Policies on Inflation, Growth and Volatility in Bulgaria

Yu Hsing
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Yu Hsing: Southeastern Louisiana University, USA

Theoretical and Applied Economics, 2012, vol. XVIII(2012), issue 4(569), 49-58

Abstract: This paper finds evidence of the trilemma for Bulgaria, suggesting that exchange rate stability, monetary independence and free capital mobility are binding and constrained. The policy combination of exchange rate stability and monetary independence has been prevalent. More exchange rate stability increases the growth rate of real GDP whereas more monetary independence or free capital mobility reduces the growth rate. The inflation rate, inflation volatility and output volatility are not affected by either one of the three trilemma policies.

Keywords: impossible trinity; three trilemma policies; inflation; economic growth; volatility. (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (5)

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