Competitiveness in Bulgaria: An Assessment of the Real Effective Exchange Rate

Author/Editor: Chobanov, Dimitar ; Sorsa, Piritta
Publication Date: March 01, 2004
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
Summary: This paper presents an empirical analysis of the medium- and long-term determinants of the real (effective) exchange rate (RER) of the Bulgarian lev using elements from the natural real exchange rate (NATREX) and the behavioral equilibrium exchange rate (BEER) approaches. The results indicate that the RER is driven by fundamentals, including labor productivity, terms of trade, world real interest rates, gross savings, and foreign direct investment. The model also shows that there is no significant misalignment of the Bulgarian lev.
Series: Working Paper No. 04/37
Subject(s): Real effective exchange rates | Bulgaria | Economic models | Terms of trade | Exchange rate assessments

Author's Keyword(s): Real effective exchange rates | fundamental determinants | NATREX | BEER | Bulgaria | Competitiveness
Publication Date: March 01, 2004
ISBN/ISSN: 1934-7073 Format: Paper
Stock No: WPIEA0372004 Pages: 24
US$15.00 (Academic Rate:
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