Abstract

The second part of the study of the interaction between the banking system and the real economy focuses on the results of the empirical analysis of Bulgaria for the period 1991-2006. The analysis is based on the theoretical and methodological approach, presented in Part One, adapted especially for investigating the Bulgarian economy in the above-mentioned period. The article highlights the basic trends and results of the analysis, without extensive proofs. The empirical analysis consists of two sections. The first section studies the behavior of the real economy and the banking sector by means of a descriptive analysis, highlighting the available interrelations and dependences. The second section identifies the short-term and long-term dependences and causalities between development of the banking sector and the dynamics of the real economy by means of econometric modeling, pointing out the key mechanisms for exchange of effects between them and estimating the contribution and the impact of each variable in the future.