Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/181287 
Year of Publication: 
2019
Citation: 
[Journal:] Central European Economic Journal [ISSN:] 2543-6821 [Volume:] 5 [Issue:] 52 [Publisher:] De Gruyter Poland [Place:] Warsaw [Year:] 2019 [Pages:] 130-141
Publisher: 
De Gruyter Poland, Warsaw
Abstract: 
We introduce a pro-cyclical endogenous utilization rate of physical capita1 stock into a real-business-cycle model augmented with a detailed government sector. We calibrate the model to Bulgarian data for the period following the introduction of the currency board arrangement (1999-2016). We investigate the quantitative importance of the endogenous depreciation rate, and the capital utilization mechanism working through the use of energy for cyclical fluctuations in Bulgaria. In particular, a positive shock to energy prices in the model works like a negative technological shock. Allowing for variations in factor utilization and the presence of energy as a factor of production improves the model performance against data, and in addition this extended setup dominates the standard RBC model framework with constant depreciation and a fixed utilization rate of physical capital, e.g., Vasilev (2009)
Subjects: 
Business fluctuations
capital utilization rate
endogenous depreciation rate
energy use
energy prices
Bulgaria
JEL: 
E32
E22
E27
Published Version’s DOI: 
Document Type: 
Article
Document Version: 
Accepted Manuscript (Postprint)
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