This paper focuses on explaining the economic fluctuations in Bulgaria after the introduction of the currency board arrangement in 1997, the period of macroeconomic stability that ensued, the EU accession, and the episode of the recent global financial crisis. This paper follows Chari et al....

This paper utilizes an otherwise standard micro-founded general-equilibrium setup, which is augmented with a revenue-extraction mechanism to assess the magnitude of VAT evasion. The model is calibrated to Bulgaria after the introduction of the currency board (1999-2014), as one of the very few...

This note explores the problem of aggregation with non-convex labor supply decisions in an economy with both straight time and overtime. In contrast to Hansen and Sargent (1988), the paper models this as a sequential decision. Instead of changing from one to infinity, with a sequential...

This note describes the lottery- and insurance-market equilibrium in an economy with non-convex straight-time and overtime employment. In contrast to Hansen and Sargent (1988), the overtime-decision is a sequential one. This requires two separate insurance market to operate, one for...

This note explores the problem of family labor supply decision in an economy with two-member households, joint home production, and fixed cost of joint labor supply. Even though the labor supply decisions are not indivisible per se, the presence of such fixed cost and partners with unequal labor...

This paper explores the problem of non-convex labor supply decisions in an economy with both private and public sector jobs. To this end, Hansen (1985) and Rogerson's (1988) indivisible-hours framework is extended to an environment featuring a double discrete labor choice. The novelty of the...

This note explores the problem of non-convex labor supply decision in an economy with both discrete and continuous labor decisions. In contrast to the setup in Mc- Grattan, Rogerson and Wright (1997), here each household faces an indivisible labor supply choice in the market sector, while it can...

This note explores the problem of aggregation with non-convex labor supply decisions in an economy with both straight time and overtime. In contrast to Hansen and Sargent (1988), the paper models this as a sequential decision. Instead of changing from one to infinity, with a sequential...

In this paper we investigate the quantitative importance of search and matching fric- tions in Bulgarian labor markets. This is done by augmenting an otherwise standard real business cycle model a la Long and Plosser (1983) with both a two-sided costly search and fiscal policy. This introduces a...