This paper highlights the problems that neoclassical theory encounters in providing a comprehensive explanation of the process of economic change. Whereas institutionalism combined with conventionalism has the merit of conceptualising economic and social processes, showing that institutions are the result of social interaction and not just structures produced by rational and maximising individuals. The Economics of Convention provides a theory of rules that is close to institutional foundations. Thus, an institutionalist-conventionalist approach will explain the interaction between individuals and institutions, shaping goals and desires, in a process of economic change due to institutional change.

The nature of the impact of Foreign Direct Investment (FDI) on environmental pollution is unclear from the available literature and the present paper examines the short-run and long-run association of FDI with carbon emissions (CO2) in BRICS countries (Brazile, Russia, India, China and South Africa). The study estimates the panel data for the BRICS region from 1992 to 2018 with yearly frequency through panel cointegration test, panel vector error correction model and panel variance decomposition. The results, though have not found any long-run relation between FDI and CO2, they indicate that carbon emissions reduce in BRICS countries with increasing FDI in the short run and support the pollution halo hypothesis. This implies that the Multi-national Companies (MNCs) shift relatively cleaner industries and transfer greener technologies to BRICS. The results also indicate reverse causation running from CO2 to FDI in the short run. Furthermore, the Gross Domestic Product (GDP) of the BRICS region appears to be directly influenced by both FDI and CO2. Findings suggested that BRICS countries should furthermore liberalise FDI policies and parallelly tighten the environmental regulations alongside creating awareness and enhancing the capabilities of the country to absorb efficient and eco-friendly technologies. Policies should provide impetus to industries to shift energy-efficient technologies and less emitting equipment.

George Josef Stigler is known as the scientist who strongly influenced the formation of the Chicago School of Economics. He promoted the idea of expanding price theory beyond the boundaries of economics and developed it into a universal model for the analysis of human behaviour, known as the economic approach to human behaviour. His research inspired the Public Choice literature and the Economic Theory of Law. Besides, Stigler made numerous contributions which nowadays are integral parts of economic theory. In this essay we summarize some of Stigler’s outstanding contributions, particularly his work on information economics and the economic theory of regulation.

The article examines the conditions for leadership and team thriving. The goal is to detail and extend a theory of ‘thriving leadership’ based on an analysis of Bulgarian and international research in this field. Leadership theories are analyzed in support of thriving leadership, examining in detail its layers – individual (coaching, communication, leadership, emotions and change), team (leadership as a dynamic phenomenon of group dynamics, global cross-cultural and virtual teams, and the question of meaning and purpose) and organizational (The “Bulgarian dream” and B-Corporations movement). The author's thrive matrix is presented, explaining the internal conditions for personal leadership thriving.

The purpose of this study is to examine the short-horizon stock behaviour following large monthly price changes of the large, liquid stocks in the Indian stock market. The event study methodology is used with two different methodologies and three abnormal return computational methods to improve the robustness and reliability of the results. This study evidences significant reversals following both large price declines and increases up to six months. Further, stronger initial shocks were followed by stronger reversals. The results are consistent with the ‘overreaction hypothesis’ in the Indian stock market. The results are robust to microstructure effects, extreme events, industry, period, methodology and market effects. The abnormal returns following large price declines might be economically significant with potential economic profits for traders.

As a stage of technological changes, digitalisation opens a new world for human society and economic development, where the traditional views on the labour market face significant challenges. The current study presents the views on the nature of digitalisation, its manifestation according to the adopted measurement indicators, and the place of Bulgaria in these processes. The study focuses on the discussions in the economic literature on two important issues about the impact of digitalisation on the labour market. The first issue is what quantitative changes are possible in labour/job demand as humans are replaced by technology. The second issue is what changes occur in the nature of labour, respectively, in the professions and skills of the employees.

The present study analyses wage income inequality in Bulgaria during the period 2010-2019, using data from the National Revenue Agency (NRA) on the actual incurred income of taxpayers and survey data on wage income from the Household Budget Survey of the National Statistical Institute (NSI). Key indicators of income inequality are derived under both approaches, which are compared and evaluated through descriptive analysis. The NSI survey data permanently underestimates the level of income and inequality in its distribution, as evidenced by the Gini coefficient, the decile and percentile ratios, as well as other indicators based on them.

The One Belt, One Road Initiative (OBOR/BRI) is a global programme to finance transport (rail and highway) and energy infrastructure, mainly in Central Asian countries, in the form of cash loans provided on unfavourable (market) terms compared to financing from donors in Western Europe (including the EU) or from development banks. The present study is an attempt to summarize the achievements and problems in the implementation of this initiative. The aim is to show the possible opportunities for Bulgaria to join the BRI given the complex political-economic global environment, marked by the difficulties in overcoming the Kovid-19 pandemic and the consequences of the war between Russia and Ukraine. Our main interest is focused on the inclusion of the territory of our country in the launched international transport corridors and the possibility of their continuation within this initiative.

The empirical research aims to identify the motives of NGOs for initiating and entering into partnerships with business. The study was conducted using a web-based questionnaire completed by 112 non-profit organizations in Bulgaria. It was found that the main motives of these organizations are related to the opportunities for financial support, in-kind donations and management of larger projects of public importance. The Wilcoxon signed ranks test applied confirms the presence of a statistically significant difference between financial support and other motives. At the same time, partnerships between the two sectors in Bulgaria, at least from the NGOs' point of view, are still in their early stages of development. Their support for strategic partnerships with business as a sustainable approach to current global challenges is also marginal.

Corporate governance of state-owned enterprises: In search of solutions

SOEs are again becoming the subject of research interest. Silenced during and after the wave of privatisation, the topic is resurfacing in connection with Bulgaria's participation in the Eurozone. On this occasion, the monograph of the two scientists from the Institute of Economic Research at the Bulgarian Academy of Sciences, prof. Spartak Keremidchiev and Dr. Miroslav Nedelchev, who set themselves a large-scale goal - to identify the state of affairs and to bring out the most important problems of corporate governance of state-owned enterprises so that they can be solved by appropriate means.

Dealing with the rapid development and application of new technologies and with the accompanying economic and societal changes, the question of their theoretical rethinking as a basis for correct management decisions is nowadays more and more urgent. A response to this need is the recently published book by Profs. Mariana Mazzucato's "The Purposeful Economy", dedicated to the problem of overcoming the crisis of capitalism by solving contemporary development challenges. In it, the author proposes a theoretical rethinking of both the new realities and the accompanying problems, as well as possible new practical solutions aimed at overcoming the crisis of capitalism, understood as the inability to tackle the new problems through the traditional mechanisms of the market.

Abstract: The article analyzes the state of the economy and the emerging trends resulting from the COVID-19 pandemic. The potential risks (external and internal) on economic development are outlined and an analysis of the prospects in the medium and long term is made. The processes of changes in the banking sector related to the redistribution of the financial services market have been identified and analyzed. With regard to the labor market, it is concluded that labor resources are irreversibly declining, and the qualitative characteristics of the workforce become essential.

The fact that the flexibility of the labor supply depends to a large extent on people in the older age groups is considered an unfavorable trend. With regard to the development of the National Recovery and Resilience plan, it is concluded that Bulgaria continues to lag behind within the EU both in terms of the time of submission of the plan and in terms of the degree of coverage of individual criteria and access to financial resources.

Abstract: The key prerequisites, regularities and processes associated with the design and operation of highly efficient virtual teams are studied. The indicators for team effectiveness are specified and the specific influences of various factors on the immediate results are analyzed – structure of the virtual team, social and emotional commitment and individual characteristics of the team members, performance management and virtual team dynamics. The focus is on the main challenges for to the effectiveness of virtual structures at the organizational, team and individual levels. The multifaceted multilateral connections in the team structures are explored through the prism of virtuality and geographical variance are studied. The goal is to find a common theoretical and methodological basis to identify the conceptual dimensions of team effectiveness in a virtual environment.

Abstract: This article summarizes the main distinguishing characteristics of the interactions between economic agents in individualistic and collectivist cultures. A brief systematization of the debate in the literature on the relationship between culture and economic development is proposed and the productivity for the economic analysis of a good knowledge of the peculiarities of national cultures is substantiated. The review necessarily includes evidence and arguments for the existence of mechanisms through which deep aspects of culture influence economic performance, e.g., through the formation of beliefs and preferences – as demonstrated by the effects of social capital. Some of the apparent contradictions in the hypotheses presented can be resolved by considering the scope of the group to which the collective identity and perceived shared responsibilities extend. This leads to the main conclusion of the analysis that the kind of collectivism that hinders economic development usually consists in loyalty to a narrow social group.

Abstract: The article analyses the risks to the independence of regulators as a fundamental element in the liberalization of energy markets in the European Union in the light of the capture theory. Issues related to the normative aspects and current case law determining the parameters and guarantees for the independence of the regulatory authorities are studied. These are examined in the context of the current electricity price crisis and the national measures taken to address these challenges in relation to the regulated segment. Recommendations are formulated to align with good practice and with the current requirements related to the independence of the national energy regulator.

Abstract: Consumer and housing lending are an expression of one of the significant functions of Bulgaria's banking system. The development of housing and consumer lending has a magnitude in several societal systems, making any changes related to household lending of significant interest to society, government authorities and regulators. The object of the study is bank housing and consumer lending. The aim is to identify and assess the factors influencing household lending. In this regard, a critical analysis of the econometric models used to estimate and identify the factors in the area of household lending is carried out. The time horizon of the historical data of the econometric analysis is the period 2004-2020, covering an entire economic cycle.

Actual research on strenghtening the academic-business relationship

BULGARIAN ECONOMIC POLICY IN A MANAGERIAL CONTEXT 1920-2020

Abstract: The article presents a summarized characteristics of neoclassical economics methodology, its components, and expressed views. The identified core features of economic methodology are: apriorism; deductivism, a priori deductivism; axiomatic/postulate method; axiomatic-deductive theory building; mathematical formalization; the concept of true theory, typical for neo-classics; instrumentality; theory testing through predictions of its effect, automation, reduction and methodological individualism; ignoring the community and natural environment. Conclusions are made that (1) the leading impact factor for neoclassical economics growth is a priori and axiomatic deductivism in particular (and not methodological individualism, as commonly accepted) and (2) the primary reasons for the development of neoclassical economics in the second half of the 20th century till now, as an instrumental and not an explanatory theory, and its discrepancy with reality, are mainly due to the methodology. A question is raised: what kind of theory – instrumental or explanatory – should be taught in universities and dominate in the expert, macro-management and public space?

Abstract: In recent years we have witnessed profound institutional changes in the character of central banks and in their monetary policies. These transformations are the result of a number of factors, most notably the crisis that began in 2008, as well as the large-scale processes of digitalisation of money. The place and specific mechanisms of the financial stability system, including of the lender of last resort (LOLR), are also evolving. In this context a review of the historic development of the LOLR could be particularly useful.

This article aims to present the first steps of the LOLR in Bulgaria in the years of the Great Depression and the banking crises related to it. The various institutional forms of the LOLR in Bulgaria are described in sequence. The role of the Bulgarian National Bank (BNB), as the LOLR in the systemic crisis and the rescuing of Credit Bank in 1931, and the theoretical discussions among Bulgarian economists about the LOLR have been examined

The Covid appeared in November 2019 in China and was declared a “pandemic” in March 2020 by the World Health Organization. It surprised the whole world: all countries are affected, airborne at high speed, mutant and playing with measures against it, insensitive to nationalities, the richest are by far more affected than the poor, and victims by the millions. It has forced life to withdraw from its usual spaces of deployment, except for places where the macabre accounting of the disappeared is rampant.

In a context of such disarray, and if we agree with Robbins (1932, р. 15) that “Economics is the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses”, it may be useful to question the force of the laws, rules and other theorems stated by such a science in the face of a pandemic whose severity index, which reaches a maximum of 5, is equalled only by that of the Spanish flu of 1918-1921. To do so, we use an analytical methodology in that by briefly revisiting the ideas of the last six of the twelve seminal thinkers identified by Yueh (2019) (Joseph Schumpeter, Friedrich Hayek, Joan Robinson, Milton Friedman, Douglas North, and Robert Solow), we attempt to discuss the resilience of their ideas (or the permanence of the relevance of their findings) in the light of the pandemic. The result indicates that not all ideas are immutable.

Abstract: The actuality of the topic of circular economy is dictated by the need to find a solution to contemporary environmental, economic and social problems. The study's main objective is to trace the development of the concept of circular economy and derive a modern definition of the notion. In this regard, the leading indicators for measuring the success of circular activities at the company level are analyzed, summarized and evaluated. A literature review on the evolution of the circular economy concept is carried out, based on which definitions and main characteristics of the circular economy concept are derived. Practical tools for measuring the success of the transition to a circular economy at a firm level are presented. The study concludes with some general recommendations on the future development of circular economy policies and the measurement of their results.

Abstract: The application of advanced pricing algorithms is becoming an increasingly common practice in the real economy. On the one hand, this is associated with improvements in the efficiency of firms, but on the other hand, it may pose a threat to market competition and thus have undesirable consequences for consumers. This article keeps track of the current interdisciplinary discussion on the possibility of pricing algorithms to achieve colluding behaviour. This possibility seems not only theoretically possible but also ever more practically feasible. At the same time, policy instruments are, at least for the moment, limited and pose new challenges to competition authorities.

The "Economic Metronome" (EM) is a term, used for the mathematical formula of a set of fundamental interrelations of key importance for the monetary-value expression among: the main factors of economical activity of any range; their productivity; the primary proportions in production, distribution, exchange and consumption of the output commodity product; the speeds of development of the activity. The formula is an attempt to design an instrument for more accurate measurement of the potentially possible and the actually achieved efficiency of economical activity, as well as for more reliable forecasting and projecting its further development on the investment-innovative stage.