 Foods and Non-foods: Relative Prices and Economic Disruptions in Modern and Contemporary History of BulgariaKaloyan Ganev,
Ralitsa Simeonova-Ganeva () and
Martin Ivanov ()
Proceedings of the Centre for Economic History Research, 2025, vol. 10, 25-38 Abstract: This study examines the long-term dynamics of food versus non-food relative prices in present-day Bulgaria from 1750 to 2020. Using a fixed consumer basket comprising 11 food and six non-food items, we develop a consistent series of this price ratio. We subsequently establish two types of benchmarks corresponding to a notion of (near-)equilibrium: an interquartile-based benchmark and a long-term trend. We then identify the periods during which the series dynamics diverged from these benchmarks. These deviations are considered in relation to potential linkages with events such as wars, climatic shocks, institutional changes, exchange rate misalignments and administered pricing regimes. Our findings indicate that the food/non-food ratio remained broadly stable over the long term, with significant but temporary deviations coinciding with historical short-term disruptions. Periods of unusually low ratios, when food was inexpensive relative to non-food, correspond with abundant harvests, suppressed food prices, or costly imports of industrial goods, as observed during the late Ottoman agrarian economy, Tanzimat reforms, the Crimean War, and Bulgaria’s 1996 financial crisis. Conversely, high-ratio episodes, when food became expensive compared to non-food, arose under conditions of agricultural shortfalls, requisitions, rationing, and price controls, such as wartime blockades, world wars, and the socialist era. The transition of the 1990s exhibited the most volatile dynamics, whereas post-2000 integration coincided with reduced volatility and re-centering near the historical mean. The analysis highlights the political economic dimension of relative prices as a distributional barometer: rising food prices favored rural producers, whereas rising non-food prices advantaged urban producers, reflecting the price-scissors framework. Despite episodic distortions, we do not detect statistically significant level shifts in formal break tests (Bai-Perron). Rather, deep general equilibrium linkages maintained the connection between the two bundles through labor, energy, and trade markets. In periods characterized by competitive markets, the price ratios typically oscillate within defined bands. Conversely, during periods of diminished or absent market competition, price distortions are prevalent. This observation underscores the critical role played by market institutions in the evolution of price ratios. The empirical findings establish a benchmark for comparative analysis across various regions and economies. The straightforward yet effective approach we propose for identifying price distortions could serve as a reliable tool for examining price trends, which is robust to typical historical data limitations. Keywords: relative prices; food–non-food ratio; price scissors; price distortions; Bulgaria; economic history; administered pricing; economic disruptions (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ceh:journl:y:2025:v:10:p:25-38 Access Statistics for this article More articles in Proceedings of the Centre for Economic History Research from Centre for Economic History Research Contact information at EDIRC. |
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