 Building Monetary Credibility in a Transforming EconomyInternational Center for Public Policy Working Paper Series, at AYSPS, GSU from International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University Abstract: This paper uses unique survey data from Bulgaria, a transition economy with a currency board, to examine the following questions: 1) what is the level of confidence in the currency board over various time horizons, 2) how cognizant is the population of the restrictions a currency board imposes on monetary policy, and 3) whether those restrictions enhance agents' confidence in sustained financial stability. The results show that eliminating monetary policy enhances short-term credibility but does not have a significant effect of long-term credibility. Backing the local currency with foreign exchange reserves enhances both short-term and long-term credibility. However, the credibility-enhancing effect of the currency board is restricted to a group of agents who are more directly involved in the economy. The expectations of the remaining large majority of the population are based on political attitudes and various life experiences. Keywords: Bulgaria; transition economy (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:ays:ispwps:paper0212 Access Statistics for this paper More papers in International Center for Public Policy Working Paper Series, at AYSPS, GSU from International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University Contact information at EDIRC. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.