Keywords: world economy; economic outlook; main indicators for Bulgarian economy; Bulgarian economic development
The paper reveals the world economic development in retrospective period with a stress on the past few years. It tries to find the interconnections between the different factors and phenomenon. The trends in the leading economies are outlined – the USA, China, Japan, Germany and the Eurozone. Special attention is paid to Gross Domestic Product (GDP) growth rates, economic activity, and inflation rates. Short-term forecasts are made and a comparison with ready predictions is done. The major issues for the future development are assessed. The main macroeconomic indicators for Bulgaria are discussed and explanations for their specific movement is given – GDP growth, its components, export, import, budget deficit, debt to GDP rate, inflation and unemployment rates, etc. The specific factors which influence Bulgarian economy are found and solution for the mitigation of negative ones is given. At the end a forecast for the development of the economy of Bulgaria is given based on analysis of empirical information.
More...Keywords: economic dynamics of the EU; dynamics of the world economy; gross domestic product; Kondratiev waves; great depression; world war
A comparative analysis is made of the economic dynamics of the EU in relation to the dynamics of the world economy from 1970 until now. Several economic indicators are analyzed – Gross domestic product in dollars at constant 2015 prices, exports and imports in dollars at constant 2015 prices, research and development expenditures as a percentage of GDP, and data on dealing with the coronavirus pandemic 19. The complex situation facing the world and European economies is outlined in relation to the specific moment in which they find themselves – at the bottom of the transition from the first to the second Kondratiev long waves – respectively the risks of a Great Depression and a world war.
More...Keywords: cohesion; cohesion policy; cohesion indicators; European Union
To implement common policies in the EU, the Member States need to have a very strong cohesion among them in all the three dimensions of the cohesion specified in the EU treaties - economic cohesion, social cohesion, and territorial cohesion. But how do we determine the size of cohesion? How can we assess whether the financial means used for cohesion measures in the EU have in fact given the necessary result? If we want to measure cohesion, we must define a proper set of indicators that actually measure it and not only various side effects associated with it. This article examines two possible approaches to assessing cohesion in the EU. The first of them is labeled by the author as a traditional approach. It is based on the understanding that the convergence process is a kind of catch-up development of the Member States and regions that lag EU average in various aspects. Another approach proposed by the author is labeled as a new approach and is focused more on the fitness and readiness of Member States and regions to function together as one organism.
More...Keywords: Euro Area; Bulgaria; accession; convergence criteria
The 2022 Convergence Reports from the European Commission and European Central Bank are currently the last official assessments of the preparedness of the EU Member States that are outside the euro area about their readiness to adopt the euro. In these reports only Croatia was assessed as a Member State that is ready to adopt the euro. The paper will analyse the assessment of the EU institutions on the Bulgaria readiness to adopt the euro. The initial reading of the reports may suggest that they are not too positive about Bulgaria as there are several requirements that shall be further met in the short to medium term, including in relation to the price stability and the need to further amend the legal framework. However, these reports contain also many good news for Bulgaria that will be the focus of the current research.
More...Keywords: SEE countries; OECD Trade Facilitation Indicators; gravity model; trade; trade facilitation
In this paper we analyze the exchange of goods between the countries in Southeast Europe (SEE). By application of the gravity model of international trade, we determine the drivers of trade among 10 SEE countries: Albania, Bosnia and Hercegovina, Bulgaria, Croatia, Montenegro, Moldova, North Macedonia, Romania, Serbia and Slovenia. The focus of the research is to evaluate the influence of Trade Facilitation Indicators (TFIs) developed by OECD on intraregional trade. These indicators cover a wide range of existing border procedures determined as trade facilitation measures. The individual estimations show that, after controlling for the usual gravity model variables, seven out of the total eleven TFIs show a positive and significant impact on trade in SEE. These results point to the existence of a potential for a further boost of the intraregional trade by improving the activities related to information availability, formalities-documents, fees and charges, formalities-automation, formalities-procedures, appeal procedures and governance.
More...Keywords: European global values chains; Central and East European countries inclusion in industrial network; COVID 19 and the impact on European GVCs
Globalization has given rise to new forms of production and trade, which have found expression in the fragmentation of production processes within Global Value Chains (GVCs). The European Union is an open economy and the European single market, European GVCs oriented their investments, not only in Southeast Asia and mainly China, but they localize industries in geographically close regions, as Central and East European (CEE) countries. The EU CEE member states were bound by production and trade value chains and they became part of the international trade. Recently, the pandemic crisis related to COVID-19 changed the structure and the organization of GVCs and they followed (albeit more slowly) to strengthen the broken connections and productions. The EU faces new challenges in relation to rising inflation and rising economic and political risk factors. Questions are being asked about the future economic and political power stance in the world and how it would affect European companies and the EU‘s goals towards a digitalized and green economy.
More...Keywords: trade finance; bills of exchange; negotiable trade finance instruments; acceptance houses; documentary credit; documentary collection; cash-in-advance; open account
Similar world trade finance instruments stayed in use from long-term perspective more than eight centuries. The bill of exchange has proven to be extremely flexible. Its transformation over time reflected the evolution of global trade finance market. Nowadays the structure of trade finance market is the same as it was at its origin. Local banks and local branches of world banks offer to firms a range of products. In combination with credit insurance or guarantees as additional government`s support medium-term trade finance (or export finance) has been comparatively more flexible in comparison with short-term trade finance. Trade finance kept its low-risk profile in the turbulence times.
More...Keywords: green bonds; regulation; EU green bond standard
The financial markets, and more specifically the debt markets are expected to play a significant role in the transition to a green economy. One of the instruments that offers several advantages and whose market has seen the most substantial growth in recent years are green bonds. Currently the green bond market regulation is based on private governance and market-based standards, as there is no public regulation. With the launch of the EU green bond standard, the EU is going to pave the way for a public governance in this field. Therefore, the paper aims at exploring the current state and the development of the European green bond market, as Europe is a leading player. Additionally, I try to compare the suggested EU standard to the existing private standards, namely the Green Bond Principles and the Climate Bond Standard.
More...Keywords: banks; financial statements; regression analysis
Banks’ financial statements are the main source of information for a wide range of users (investors, regulatory authorities, etc.). A qualitative analysis of the information contained in the elements of financial statements is a prerequisite for making justified and constructive decisions. This paper presents a research that aims to assess the significance of information relationships among the elements of the financial statements of banks as a starting point for analysing their financial position. The research thesis is that the relationships and dependencies among financial statement elements should be used as a basis for structuring the indicators and models for analysis of banking activity in order to obtain qualitative analytical information that would help the users of these financial statements (including bank managers and supervisory bodies) make informed economic decisions. To prove this thesis, the following hypothesis was formulated and empirically tested: financial statement elements reflect different aspects of the economic processes taking place in banks and therefore there is an interdependence among the positions (items) of the financial statements. The correlation of certain financial statement positions was identified and measured by means of regression and correlation analyses of the data from the financial statements of Bulgarian banks published on the official website of the Bulgarian National Bank. The relationships were determined using a univariate linear regression analysis while the covariance was measured using the Pearson correlation coefficient. The research covers twenty-five banking institutions (including branches of foreign banks) operating on the territory of our country. The results of the research determine the relationships and correlations among certain positions of the financial statements of these banks and empirically confirm the formulated hypothesis, which in turn corroborates the main research thesis.
More...Keywords: Bank for International Settlements; COVID-19 pandemic; global financial and economic crisis
In this paper, the effects the implemented Basel standards have had on the resilience of the banking system and banks’ behaviour during the period of the COVID-19 pandemic have been evaluated. The measures taken by the Bank for International Settlements to limit the negative impact of the COVID-19 pandemic on banks have been examined. The Bank for International Settlements’ response to economic crises has been studied.
More...Keywords: migration; emigration; immigration; labor market; European Union
The paper analyses the migration trends in the EU in the last decade (2013 – 2020) – emigration and immigration. The net migration is then presented and analyzed in terms of its major economic and social consequences and its potential impact on the European labour market. For that purpose, migration and migrant population data from Eurostat are used to analyze the current state and perspectives on union and country level, as well as some projections and analytical reports regarding the labor force deficit in them.
More...Keywords: marketing strategy; innovation process; product innovation
In the last few decades, the world industry has witnessed a turbulent development due to new technologies, leading even to the creation of new types of entrepreneurship. The purpose of this report is to discover the importance of innovative activities as an element of the organization’s marketing strategy for successful and sustainable development. The report provides a brief literature review of the main concepts applied in practice in the organization: innovation, product innovation and process innovation. In addition to clarifying the meaning of these concepts, the author also aims to highlight the effect of adding value to already existing products or services in order to improve company productivity and competitiveness. Based on a survey conducted on 150 enterprises in South-Eastern Bulgaria, the research seeks to shed light on what is the attitude of management towards the process and product innovation base and the degree of their positive impact on the strategic company on the innovation focus process.
More...Keywords: artificial Intelligence; economic growth; economic freedom
Artificial Intelligence occupies the minds of scholars, researchers and curios people. In the economic context, there are numerous topics concerning Artificial Intelligence to think about. Implementation of such disruptive technology will presumably increase economic growth as a whole. Looking at the details, we cannot conclude unambiguously that this will happen in a proper manner. This article will try to look beyond the current development of artificial intelligence applications. These days, we use more and more of them. There are numerous fields of applications of Artificial Intelligence such as natural language processing, machine learning, problem-solving, uncertain knowledge, robotics, etc. Meanwhile, our world still does not have the full-fledged Artificial Intelligence, one who can substitute man. When this happens, there will be a completely different society with new economic and social policies. This study attempts to figure out what could be the probable outcomes of Artificial Intelligence on economic theory and practice. In order to achieve this, content analysis, induction, and deduction have been applied.
More...Keywords: digitalization; ecological technology; green transformation; innovation; science; education; structural transformation
The global climatic changes and the reindustrialization of the European economy in the technological XXI century construct a cause-effect chain which starts and ends with education and science: digitalization and robotization – structural economic reforms -imbalance in the labour market – professional qualification and competence – transfer of science and innovations in the applied economy – lifelong learning. The ambitious aim of the ecologically-oriented European Union is to achieve a carbonneutral economy by the year 2050. In the process of Green and Digital Transformation innovative industrial productions will be opened with the integration of digital and ecological technologies. The segments of the labour market change. The professional realization in the education, science and information and communication technologies increases, and the one in the industrial and agricultural decreases. The deficit of engineering human capital (educated and competent workforce) reaches record levels on the labour market. The focus of the study is on the education and science in the context of the Green and Digital Transformation of the European Economy. The long term aim of the research is the sustainable professional balance on the labour market. The topic concerning the European labour market is developed on the base of the modern multidisciplinary method of scientific research. The educational policies in the Victorian industrialization of the economy and the analogous present day reindustrialization are compared in the analysis and interpretation of the results of the study.
More...Keywords: European Union; Balkans; stability; prosperity; security; EU candidate and potential countries; EU member countries
The report "The role of the European Union as a factor in the security, stability and prosperity of the Balkan countries" presents an in-depth analysis of how the foreign policy priorities and the domestic political situation in the countries of the Western Balkans are changing through the harmonization of local legislation and policies with the aim of rapprochement and achieving of full membership in the European Union. After years of war caused by ethnic conflicts in the 1990s in Yugoslavia, to date the countries of the region have focused on covering pan-European norms and values, namely political stability, civil security and economic growth, so that one day to be able to join the big European family and take advantage of all the advantages that membership in the European Union would provide them - more security, more financial resources, more opportunities for development, etc.
More...Keywords: wine tourism; repositioning; experience economy; tourism product
The past three years proved to be an exceptional challenge for the development of tourism in Bulgaria. The years-long problems in the sector combined with the new global situation forced all countries involved in this economic field to realize the need to take active measures to reposition Bulgaria’s tourism product. One of the possibilities for differentiating the portfolio of tourist destination Bulgaria is through the development and promotion of local destinations for wine tourism. The present study aims to characterize the possibilities for wine tourism destinations’ development in support of the repositioning of Bulgaria’s tourism product. The research object is the local wine destinations, and the subject – their importance in the repositioning of the national tourism product.
More...Keywords: gold; investments; precious metals; regression analysis
The global development of the monetary and financial system has evolved over different historical periods. Increasingly, the subject of discussions among economic subjects are the ways to increase their financial well-being through investments in the financial markets. One of the most preferred ways to preserve and increase the financial wealth of individuals is investments in precious metals, in this case – gold, which are realized in specialized financial markets for raw materials. In this regard, the subject of discussions and analyzes in the present development is gold, as an element of the financial markets and a way of investing, and the subject is emphasized on regression analyzes related to its price values and author’s forecasts for future periods.
More...Keywords: creative accounting; accounting manipulation; detection; prevention
This paper aims to investigate the most widely used techniques for creative accounting, methods for detection of those techniques and ways of prevention of such practices. The focus of this paper will be on the earnings manipulation. Comparative analysis will be carried out to identify the most widely used methods of detection of such practices in order to facilitate users in detecting those practices. In today’s global business environment, the competition is increasing on a daily basis and every company is pushed to present its’ financial figures in a favorable way, so it looks good in the eyes of the clients, investors, vendors, banks and other stakeholders. This is the reason why more and more managers are looking for alternative ways to present company’s financial information even though it could not be the most appropriate way. We will investigate the most reliable methods to detect creative accounting techniques and the role of auditors in detecting such practices will be discussed too. Recommendations are given how to deal with the problem of creative accounting. Methods used in this study are the deductive reasoning, abstract reasoning and literature analysis.
More...Keywords: accounts manipulation; creative accounting; accounting fraud
In today’s global, dynamic, and turbulent business environment, the most prominent imperative for companies is to present their financial figures to look good in the eyes of the wide public. This is the reason that increasing number of managers indulge in accounting manipulation. However, accounting manipulation consists of two major types – creative accounting (which operates within the regulatory framework but outside the ethical standards) and accounting fraud which means manipulation stretching out of the regulatory framework and in most cases involves illegal activities. The borderline between these two terms is very tight and it is difficult even for the auditors to detect such practices if they are masterfully concealed. The main purpose of this paper is to define both terms, clarify where is the borderline between them and explore the major differences and similarities. The most prominent accounting scandals in the last century were caused by accounting fraud and this led to catastrophic consequences not only to the companies involved but also to whole sectors and economies. That’s why it is vital to explore the topic of those two phenomena, provide solutions to overcome them and recommendations for subsequent research to find ways to reduce such practices in the future.
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