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Macromodel of the Romanian market economy (version 2005)

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  • Dobrescu, Emilian

Abstract

The macromodel will be used to investigate short and medium–run economic implications of internal policies and of changes in the international context. This new version of the Romanian macromodel benefites from the experience gained by the author during the utilisation of its previous forms - either experimental (tested during 1991-1995) or operational (developed during 1996-2003). At the same time, this model introduces some methodological and informational improvements, in comparison to previous versions. The most significant of them is the structural decomposition of economy, according to the input-output techniques. Output and absorption are divided into: a) agriculture, sylviculture, forestry, hunting, and fishing; b) mining and energy; c) manufacturing industry; d) construction; e) transport, post and communications; f) trade and services. These categories can be easily translated into the classical three-sectors classification: primary (a+b), secondary (c+d), and tertiary (e+f). Due to the relatively advanced stage of the transitional processes in Romania, the behavioural functions were modelled - as much as possible - by the standard relationships. Besides, unlike the previous versions, that used statistical series beginning with 1980, the present one is based exclusively on information regarding the period 1989-2004. Therefore, we have considered more adequate to name this variant the macromodel of the Romanian market (not transition, as before) economy. Since the input-output tables are defined yearly, the model contains only annual indicators. They are expressed in denominated local currency (RON). When there were several informational sources for the same indicator, we preferred the data extracted or derived from national accounts. The statistical series are relatively short and often fractured (because of the transforming processes of transition). Although, it is known that ADF test of stationarity does not offer reliable results in the case of limited number of observations, generally the series satisfying it were used. The Granger causality test was computed for one, two, and three lags. The simplest methods of estimation were also preferred. The structural breaks in the evolution of some indicators have been dealt by the inclusion of dummies. Obviously, all these circumstances weaken the stability of econometric coefficients that must be continuously updated. The main relationships are grouped in seven sections: input-output block; labour market, production function; domestic absorption, foreign trade, prices and exchange rate, and interest rate. The first two chapters present conceptual framework of macromodel and econometric analysis on which it is based. The next one describes a possible scenario for the Romanian economy during 2005-2010 years. The final part of paper contains a set of simulations revealing some operational features of the macromodel.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 35749.

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Date of creation: Apr 2006
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Handle: RePEc:pra:mprapa:35749

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Keywords: model; input-output analysis; econometric relationships; simulations;

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Cited by:
  1. Institute for Economic Forecasting & Centre for Macroeconomic Modelling, 2011. "The "Dobrescu Macromodel" of the Romanian Market Economy - 2005 Version Yearly Forecast Preliminate for 2011, November Estimates," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(4), pages 197-199, December.
  2. Alina Constanţa Cojan, 2012. "Underground Economy – A Growing Challenge For Economy And Governments," Romanian Economic Business Review, Romanian-American University, vol. 6(1), pages 97-104, May.
  3. Dobrescu, Emilian, 2008. "A Desirable Scenario For The Romanian Economy During 2008-2013," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 5(4), pages 15-58, December.
  4. Emilian Dobrescu, 2013. "Updating the Romanian Economic Macromodel," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(4), pages 5-31, December.
  5. Daianu, Daniel & Lungu, Laurian, 2008. "Why Is This Financial Crisis Occurring? How To Respond To It?," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 5(4), pages 59-87, December.
  6. Institute for Economic Forecasting & Centre for Macroeconomic Modelling, 2011. "The "Dobrescu Macromodel" of the Romanian Market Economy - 2005 Version - Yearly Forecast – Autumn Forecast 2011, September Estimate," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(3), pages 267-269, September.
  7. Dobrescu, Emilian, 2006. "Integration of macroeconomic behavioural relationships and the input-output block: Romanian modelling experience," MPRA Paper 35748, University Library of Munich, Germany.

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