Issue 4, 2017

The paper aims at analyzing the impact of the global financial and economic crisis in 2008-2009 upon economic theory. The focus is on the dominant theoretical paradigm: the neoclassical theory (economics). The research consists of two parts. The first analyzes the effects of the crisis on the neoclassical theory. The main directions of criticism against economics in the light of the last crisis are presented. Within the context of the philosophy of knowledge the issue about the “failure” of economics to predict the crisis, is discussed. The second part of the paper deals with some new processes and phenomena in the field of economic theory – both orthodox and heterodox, which develop in the post-crisis period. The final conclusion of the author is, that there are deserving attention novelties in the sphere of economic ideas. They, most probably, outline new perspectives in front of economic theory: in front of the science, and in front of the teaching of economics.
JEL: A20; B22; B41

The current study presents the essence and goals of the system of local finances. It conducts a comparative analysis and assessment of the types of services, the structure of local expenditures, the main revenue sources for local budgets, the way the system of government transfers functions, and the legal rights of local government in the EU with regard to expenditures and revenue generation. Furthermore, the study draws comparisons and analogies with the practice in Bulgaria. The conclusion presents theoretical and practical summarizations of the international experience and on that basis formulates recommendations for improvement of the system of local finances in Bulgaria.
The main formulated recommendations are as follows: Bulgarian municipalities are comparatively large, which is why the creation of a second level of local government is unjustified; conditions for local democracy can be created by transferring legal powers and resources from the municipalities towards their territorial structures – the mayoralties; the municipalities need to receive legal powers to provide services relating to combating everyday crime, local fire protection and protection of the harvest; the scope of social service provision needs to be increased; the municipalities need to receive expenditure powers with regard to delegated services;  the municipalities need to be given legal rights to vote on taxation rates up to 2-3% within the general 10% rate of the personal income tax.
JEL: H7

The paper reasons the necessity and significance of the study of social-demographic characteristics of the ethnic groups in Bulgaria. It determines the changes in the social-demographic structures of the Turkish and Roma ethnic groups, considered an object of the study. The paper outlines the normative framework for identifying the term “ethnic group” as a premise for a reliable study of the relevant social-demographic characteristics. It systematizes the typical social-demographic characteristics and profiles of the Turkish and Roma ethnic groups. It analyzes and evaluates the state and dynamics of the relevant parameters. The paper outlines the possibilities for their use as a source of information for interrelated economic and social studies. It draws conclusions and concrete recommendations for the competent authorities for making grounded governance decisions.
JEL: J1; J11; J21; J24

The paper discusses the patterns of individual consumption in Bulgaria after 2008 and we focus our research on processes in the real sector the crisis amplified or made more resistant. We analyse the structure of household income and expenditures through tracing the dynamics of actual and potential GDP, inflation, actual and equilibrium unemployment, savings and credits of households. The basic conclusions revolve around the significant impact of the business cycle fluctuations on the structure of household income against relatively stable preferences for private consumption which is in line with the permanent income hypothesis and shows low sensitivity of households’ expenditures to the business cycle phase. The considerable increase of household deposits and very low credit activity are also cyclically driven and show that although the real GDP structure in terms of the shares of domestic and external demand is more balanced after 2008 this does not transform into better conditions for doing business and increasing employment.   
JEL: E20; E32; E66

This article examines the main reasons for the collapse of oil prices from mid-2014 onwards. The main purpose of the author is to determine whether the processes on the crude oil markets are dictated primarily by objective economic circumstances or lead mainly by different geopolitical interests.
The results are rather in support of the first claim – the collapse in prices is caused by oversupply, expectations for an economic slowdown in emerging economies and the refusal of the members of the Organization of Petroleum Exporting Countries (OPEC) to continue to use production quotas as a price regulation tool. At the same time the pursuit of geopolitical interests of countries like the US and Saudi Arabia should not be ignored, but it is rather a secondary, reaction to the current market situation.
JEL: F12; F14; Q02

This study addresses the economic performance of the Egyptian economy during the periods before and after the 25^th January upheaval in 2011. It analyses, in particular, the extent to which monetary and fiscal policies contribute to the phenomenon of stagflation in Egypt after 2011. The study adopts Gordon’s (1977 & 1985) model in specifying the relationship between inflation, unemployment, and real GDP growth. SVAR model has been employed to determine the factors behind stagflation in Egypt. The results suggest that macroeconomic performance does not significantly change during the periods before and after the 2011 and stagflation occurs in Egypt through the following mechanisms; (i) the existence of excess demand in the commodity market in conjunction with the existence of structural unemployment in the labour market. (ii) An existing mutual relationship between inflation and unemployment where both inflation and unemployment feed each other through the wage-price spiral and the elevation of the cost of production triggered by domestic currency depreciations. (iii) The subordination of monetary policy to fiscal policy which is in line with the fiscal dominance hypothesis and crowding out effect. (iv) Expected higher rates of inflation, through the expectations channel, shifting Phillips curve upwards.  
JEL: E24; E31; E60

The article investigates the philosophical and methodological problems of defining the principles, the realm and the boundaries of mutual coexistence and interpenetration of functions of the market economy and the society from the standpoint of achieving a sustainable synergistic effect in the process of implementation of the strategic needs of the mankind in general and of an individual person in particular. A critical description of forms of modern economic and social contradictions is presented, the intensification causes of the growth of irrational, distorted and “twisted, treacherous” forms of the spiritual life of economic systems and the society are revealed. The article pays great attention to the analysis of the dialectic unity and opposition of the society's moral values as a peculiar systemic realm of relationships between people, and to the “value rationality” of the modern market economy.
JEL: B00; G28; H2; I38; N1

The article provides the analysis of the entrance into the innovative activity and organized regulation of interaction which is based on the scientific and technological changes, concentration of production and the feasibility study of administrative decisions, which are dominated by a conglomerate of technical, technological and engineering management decisions. The research formulates the provisions for the productive use of business as the form of economic relations which is based on the entrepreneur function. These provisions are formulated basing on the conditions of efficient division of labour and cooperation. The research singles out a number of systemic positions which allow perceiving logically and distinguishing the production, service and business, to distribute human activities between the groups of occupations and types of service activities. Among these systemic provisions the most efficient is a modelling approach which, when the society enters more complex social and economic stage, transfers the science from the environment of operations with the bulk characteristics into the environment of the analysis of specific sets of coefficients. The logistics of Ukraine’s joining the process of business is associated with the position of the recognition of the primacy of the physical abilities of the person, which should be developed in part in the system of public security and partly in the business environment, commercialization and private capital. Person enters the business environment and habitat as an initiative individual. These indicators are the following: «connections» between the old and the new, between the objects which exist and those which only start to appear and will exist in future; «sources» of development, movement, changes; «mechanism» of development, ways of changing from old to new quality; «direction» of development; «style» of thinking, understanding reality; «essence» of true knowledge; «essence itself» of cognition; «alternativeness» of metaphysics and dialectics.
JEL: B12; B13; B24; I25; L84; M21; O52; Р2; Р46

The movement of multiple groups of refugees and migrants to countries from the touristic macro region of Europe became one of the historical phenomena of the new century. In particular, the refugee stream of recent years has a decisive impact on the demand of touristic services to the Greek islands in northern Aegean Sea. Tourism in Greece is an important source of income by providing more than 9% of the GDP and stimulating the development of other related economic sectors such as trade, agriculture, and communications. It also provides about 30% of the total workforce in the country. Because of their favourable location, near the coast of Turkey the islands of Lesvos and Chios became a bridge to Western Europe for large numbers of refugees and migrants. This study aims to reveal the local impact of the refugee and migrants’ crisis on tourism development in Greece and particularly on these two islands Lesvos and Chios.
For this purpose a research was conducted based on a representative sample, which includes the survey of 168 hotel managers. The primary empirical data was collected from the local hospitality entrepreneurs and was registered. After processing and analyzing the data, the research results show that there is a significant difference in percentage of reservations between January – February 2015 and January – February 2016 and the same about cancellations. As main reason for this situation the majority of the interviewed show the refugee and migrants’ crisis.
JEL: Z32