Many countries fix their exchange rate in order to bring financial stability. Usually, inflation declines and output expands but contractual agreements retain their short time frame, investment is sluggish, and economic growth slows down a few years later. This outcome is often attributed to...

We use unique survey data from Bulgaria’s tax administration to evaluate the determinants of corruption risk. We construct a novel measure of corruptibility, defined as the gap between actual income and the self-reported corruption-proof income. The survey data show that raising incomes leads...