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The Complexity Of Inflationary Phenomenon In Romania And Its Implications

Author

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  • Ioana Duca
  • Constantin Stoica

Abstract

Inflation is the main imbalance factor that Romanian economy faced during the last 16 years. Despite the positive evolution in the near past, this country is still the one with the highest inflation level among the countries in transition period. The main reasons for this delay are: the fitful and protracted price's liberalization, the slow progress in privatization, the stop-and-go stabilization efforts and the relatively late start of National Bank in the strategy of competitive disinflation. Starting from August 2005, the National Bank of Romania (NBR) introduced the strategy of inflation targeting, which implies: the public announcement of a quantitative inflation target; the price stability being set as main goal of the monetary policy; a wide set of good macroeconomic data; the technical capacity of NBR to forecast inflation and an increased level of transparency. This strategy will be applied in Romania until the ERM II, because the NBR has considered inflation targeting to be the most appropriate medium term monetary policy framework.

Suggested Citation

  • Ioana Duca & Constantin Stoica, 2006. "The Complexity Of Inflationary Phenomenon In Romania And Its Implications," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 2(8), pages 1-26.
    • Handle: RePEc:alu:journl:v:2:y:2006:i:8:p:26
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    More about this item

    Keywords

    inflation; inflation targeting; monetary policy;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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