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The main goal of the paper is to assess the relationship between inflation, inflation instability and nominal uncertainty in the Bulgarian economy in January 2000 - May 2022. Employing the ARCH model, GARCH-M model, EGARCH model and Granger Causality Test we find a two-way causal relationship between inflation and inflation instability. Initially, inflation provokes inflation instability, and inflation instability provokes inflation consequently. Nominal uncertainty is measured by wavelet analysis, which establishes the presence of nominal uncertainty in the Bulgarian economy. Therefore, at certain lags, the inflation instability is transformed into nominal uncertainty. The empirical evidence raises the question of the effectiveness of the Currency Board Arrangements in Bulgaria. [ABSTRACT FROM AUTHOR]

The importance and possibilities of fiscal policy have been neglected by academics and politicians for decades after the macroeconomic revolution of 1970-1980. However, the Great Recession, the crisis in the European Union and the prolonged recession in many European economies have once again put fiscal policy, and especially its stabilizing role, at the centre of expert and public discussions. In countries with a high share of the public sector in the economy and whose monetary policy is constrained by various structural features of the economy and the financial system, the role of fiscal policy is particularly important, and it is a key lever of economic policy. These features characterize most countries in Central and Eastern Europe (CEE), which makes this region convenient for analyzing the effectiveness of the fiscal policy. The study empirically establishes the effects of shocks in budget expenditures and tax revenues on GDP in Bulgaria, Estonia and Lithuania for the period 1995-2018, applying the vector autoregression technique known as the Vector Autoregressive Model (VAR) as well as other, non-econometric valuation methods. Key factors that affect the dynamics in the size of fiscal multipliers are presented numerically and graphically. [ABSTRACT FROM AUTHOR]

Any anti-crisis macroeconomic policy includes monetary and fiscal policy. The construction of anti-crisis macroeconomic policy in the conditions of a small open economy in a currency board and a virus pandemic raises the question of which measures should be the foundation and which measures should play a complementary macroeconomic role. This issue is extremely important because it predetermines both the efficiency and effectiveness of counter-cyclical policy. This study deals with the structuring of the main and complementary role of the fiscal and monetary policy in the general anti-crisis policy of Bulgaria. The focus is on 2020, looking at the impact of aggregate fiscal multiplier and monetary measures on GDP, based on extrapolation. A mathematical analysis is realized, which leads to quantitative results that illustrate the impact of fiscal and monetary policy on GDP development in a predictable short-term period which covers 2020 on a quarterly basis. [ABSTRACT FROM AUTHOR]