POLICY REGIME CHANGE AND CORPORATE CREDIT IN BULGARIA: ASYMMETRIC SUPPLY AND DEMAND RESPONSES

The paper seeks to assess how a major policy regime change – such as the introduction of the currency board in Bulgaria – affects the flow of bank credit to the corporate sector. An attempt is made to identify the determinants of corporate credit separately from the viewpoint of lenders and borrowers. The estimated credit supply and credit demand equations provide empirical evidence of important changes in microeconomic behavioral patterns which can be associated with the policy regime change. The results also suggest a considerable asymmetry in the response of credit supply and credit demand to the policy shock: while the supply shifts were quite pronounced, the patterns of firms’ credit demand remained fairly stable. The policy implications of the detected asymmetry in microeconomic adjustment are also discussed in the paper.http://deepblue.lib.umich.edu/bitstream/2027.42/39993/3/wp607.pd

POLICY REGIME CHANGE AND CORPORATE CREDIT IN BULGARIA: ASYMMETRIC SUPPLY AND DEMAND RESPONSES

The paper seeks to assess how a major policy regime change – such as the introduction of the currency board in Bulgaria – affects the flow of bank credit to the corporate sector. An attempt is made to identify the determinants of corporate credit separately from the viewpoint of lenders and borrowers. The estimated credit supply and credit demand equations provide empirical evidence of important changes in microeconomic behavioral patterns which can be associated with the policy regime change. The results also suggest a considerable asymmetry in the response of credit supply and credit demand to the policy shock: while the supply shifts were quite pronounced, the patterns of firms’ credit demand remained fairly stable. The policy implications of the detected asymmetry in microeconomic adjustment are also discussed in the paper.corporate credit, credit supply and credit demand, regime change, currency board, transition economy

Mark-Up Pricing in Bulgarian Manufacturing

The pricing policy of Bulgarian manufacturing firms is analysed in the paper in the context of the theory of the price-setting behaviour of firms endowed with market power, and more specifically, using the notion of mark-up pricing. Using some recent derivations in the literature, we estimate mark-up ratios for Bulgarian manufacturing sectors at the NACE 2-digit and NACE 3-digit levels. The estimated mark-ups are then tested against a set of variables measuring the degree of competitive pressure on a sectoral level.http://deepblue.lib.umich.edu/bitstream/2027.42/39773/3/wp389.pd

Mark-Up Pricing in Bulgarian Manufacturing

The pricing policy of Bulgarian manufacturing firms is analysed in the paper in the context of the theory of the price-setting behaviour of firms endowed with market power, and more specifically, using the notion of mark-up pricing. Using some recent derivations in the literature, we estimate mark-up ratios for Bulgarian manufacturing sectors at the NACE 2-digit and NACE 3-digit levels. The estimated mark-ups are then tested against a set of variables measuring the degree of competitive pressure on a sectoral level.mark-up pricing, competetive pressure, enterprise restructuring and adjustment, Bulgaria

Firms’ Price Markups and Returns to Scale in Imperfect Markets: Bulgaria and Hungary

Under perfect competition and constant returns to scale, firms producing homogeneous products set their prices at their marginal costs which also equal their average costs. However, the departure from these standard assumptions has important implications with respects to the derived theoretical results and the validity of the related empirical analysis. In particular, monopolistic firms will charge a markup over their marginal costs. We show that firms’ markups tend to be directly associated with the employed production technology, more specifically with their returns to scale. Accordingly, we analyze the implications for the markup ratios from the incidence of non-constant returns to scale. We present quantitative results illustrating the effect of the returns to scale index on the firms’ price markups, as well as the relationship between the two indicators, on the basis of firm-level data for Bulgarian and Hungarian manufacturing firms.http://deepblue.lib.umich.edu/bitstream/2027.42/40096/3/wp710.pd

Firms’ Price Markups and Returns to Scale in Imperfect Markets: Bulgaria and Hungary

Under perfect competition and constant returns to scale, firms producing homogeneous products set their prices at their marginal costs which also equal their average costs. However, the departure from these standard assumptions has important implications with respects to the derived theoretical results and the validity of the related empirical analysis. In particular, monopolistic firms will charge a markup over their marginal costs. We show that firms’ markups tend to be directly associated with the employed production technology, more specifically with their returns to scale. Accordingly, we analyze the implications for the markup ratios from the incidence of non-constant returns to scale. We present quantitative results illustrating the effect of the returns to scale index on the firms’ price markups, as well as the relationship between the two indicators, on the basis of firm-level data for Bulgarian and Hungarian manufacturing firms.markup pricing, market imperfections, return to scale, Bulgaria, Hungary

Firms’ Price Markups and Returns to Scale in Imperfect Markets - Bulgaria and Hungary

Under perfect competition and constant returns to scale, firms producing homogeneous products set their prices at their marginal costs which also equal their average costs. However, the departure from these standard assumptions has important implications with respects to the derived theoretical results and the validity of the related empirical analysis. In particular, monopolistic firms will charge a markup over their marginal costs. We show that firms' markups tend to be directly associated with the employed production technology, more specifically with their returns to scale. Accordingly, we analyze the implications for the markup ratios from the incidence of non-constant returns to scale. We present quantitative results illustrating the effect of the returns to scale index on the firms' price markups, as well as the relationship between the two indicators, on the basis of firm-level data for Bulgarian and Hungarian manufacturing firms.markup pricing, market imperfections, return to scale, Bulgaria, Hungary

Inequality and Public Policy: A Country Study for Bulgaria

This paper is an attempt for measuring the impact of public policy on the inequality in Bulgaria. An analysis based on the Bulgarian Household Budget Surveys shows that the tax burden in Bulgaria, nevertheless increasing in the upper quintiles, declined between the beginning of the transition period and the year before the EU accession. Using different inequality measures we have found that despite the limited possibilities of the data, taxation policies also contribute to some extend to inequality reduction in Bulgaria. As regards the social transfers, unemployment benefits and child allowances are found to be the main social payments reducing the inequality among Bulgarian households. Using quantile regression is found that the coefficients of the effective tax rates increase across the quintiles for the entire period. The coefficients associated with the share of VAT expenditures in the total income decrease as one moves from the lowest to the highest quintile of the consumption distribution.

Analysis of Biochemical Mechanisms using Mathematica with Applications

Biochemical mechanisms with mass action kinetics are usually modeled as systems of ordinary differential equations (ODE) or bipartite graphs. We present a software module for the numerical analysis of ODE models of biochemical mechanisms of chemical species and elementary reactions (BMCSER) within the programming environment of CAS Mathematica. The module BMCSER also visualizes the bipartite graph of biochemical mechanisms. Numerical examples, including a double phosphorylation model, are presented demonstrating the scientific applications and the visualization properties of the module. ACM Computing Classification System (1998): G.4