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Inflation In Romania And Its Evolution In View Of Accession To The Eurozone

Author

Listed:
  • Nedelescu Dumitru Mihai

    (Romanian American University, Bucharest, Romania)

  • Stănescu Maria Cristina

    (Romanian American University, Bucharest, Romania)

  • Botea Lucian

    (Romanian American University, Bucharest, Romania)

  • Croitoru Lucia

    (Romanian American University, Bucharest, Romania)

  • Iordache Gabriel

    (student, Romanian American University, Bucharest, Romania)

Abstract

In recent decades, the main problem of the world economy was a general rise in prices of goods. The pressure generated by the increase in prices leads to significant distortions in the monetary, economic, political and social areas. Inflation is the main factor of economic crisis by discouraging investment and causing migration of capital. The deteriorated stability created by inflation is strongly affecting private sector decisions to invest or develop, with final effects in reducing production and eventually stagnation. After years of high inflation, Romania has faced in recent years with a significant process of disinflation. This has very strong implications in the development of Romania's economy and foreign trade activity. In econometric models, the main statistical indicator for inflation rate is HIPC. Accession to the EU increases the importance of the HICP. Inflation nominal convergence criteria for joining the euro area is given by the HICP and the ECB defines price stability as an annual increase in the HICP of less than but close to 2%.

Suggested Citation

  • Nedelescu Dumitru Mihai & Stănescu Maria Cristina & Botea Lucian & Croitoru Lucia & Iordache Gabriel, 2016. "Inflation In Romania And Its Evolution In View Of Accession To The Eurozone," Romanian Economic Business Review, Romanian-American University, vol. 10(1), pages 51-65, May.
    • Handle: RePEc:rau:journl:v:10:y:2016:i:1:p:51-65
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    References listed on IDEAS

    as
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