Theoretical and Applied Economics
No. 2 / 2015 (603), Summer
A study of the impossible trinity in Romania
Bucharest University of Economic Studies, Romania
Abstract. Using a VECM and a Taylor type rule it was shown that the central bank kept the autonomy of the monetary policy as the policy rate was modeled primarily based on the evolution of the inflation rate. Forgoing the exchange rate stability is not possible due to the large volume of foreign currency loans and also to other factors. The inclusion in the central bank’s objective function of a variable linked to the exchange rate may cause a conflict between inflation targeting and exchange rate management. Therefore, the best approach seems to be the use, in addition to the policy rate instrument, also of FX interventions. As for the liberalization of capital flows, the decision is at least questionable, given that, on one hand, foreign capital ended up holding a significant share in the economic activity and on the other, the macroprudential measures that authorities began to implement might have limited effects.
Keywords: trilemma, monetary policy, exchange rate, policy rate, capital flows, Taylor rule.
Contents
- Instruments and practices concerning the absorption
and use of structural and cohesion funds in Romania
Ani MATEI
Carmen SĂVULESCU
- Exports – trends and impacts
on Romania’s economic growth process
Anca Maria GHERMAN
George ȘTEFAN
- Innovation and regional performance in Romania
Anca DACHIN
Constantin POSTOIU
- A multidisciplinary approach of communication
Delia Mioara POPESCU
Ion PÂRGARU
Constanța POPESCU
Daniel MIHAI
- The issue of “true” money in front of the BitCoin's offensive
Angela ROGOJANU
Liana BADEA
- Public choice and the social beneficiary
Mariana IOVIȚU
Florina BRAN
- Stock market – economy growth nexus
in an emerging country. The case of Romania
Delia-Elena DIACONAŞU
- Determinants of savings in the APEC countries
Kivanç Halil ARIÇ
- The status of Romanian agriculture
and some measures to take
Mirela Ionela ACELEANU
Anca Gabriela MOLĂNESCU
Liliana CRĂCIUN
Cristina VOICU
- Education and society: an institutional approach
Marius-Cristian PANĂ
- Financial audit – feckless for economic re-launch
Elena DOBRE
Laura BRAD
- Empirical evidence
on the Ricardian equivalence in Romania
Daniel BELINGHER
Nicolae MOROIANU
- Minimum wage – labour market rigidity factor
Andreea Claudia ȘERBAN
Mirela Ionela ACELEANU
- Regional convergence. Case of Romania
Elena Raluca MOISESCU (DUICAN)
- The exchange rate volatility in the Central
and Eastern European Countries
Bogdan Andrei DUMITRESCU
Silvia Maria ROȘCA
- A study of the impossible trinity in Romania
Bogdan BĂDESCU
- Governance process improvement
and development by audit consolitation
Adelina DUMITRESCU PECULEA
- Analysis of the evolution of foreign direct investment
in the European Union, amid the global economic crisis
Marinela GEAMĂNU
- The use of behavioral economics
in promoting public policy
Alina Maria NEAȚU
- New paradigms imposed by the global financial crisis
Ioana Andrada MOLDOVAN (GAVRIL)
- Are financial audit elements and corporate governance policies
solutions for the economic crisis?
Florin DOBRE
- The kids are alright?
A note on parental satisfaction in Germany
Stephan HUMPERT
- Technological revolution, labor markets and income distribution
in the knowledge economy
Ioana Cristina FLORESCU