IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/69501.html
   My bibliography  Save this paper

Prospects of Romania’s international investment position and financial stability risks

Author

Listed:
  • Georgescu, George

Abstract

The paper aims to investigate the changes in Romania’s net international investment position (NIIP) and to evaluate the prospects of this position, having in view the country's road towards joining the Eurozone. Among the 11 key indicators of nominal and real convergence monitored by the European Commission (MIP Scoreboard) under the macroeconomic imbalances procedure, NIIP is the only one to which Romania stands above the indicative threshold (-57% of GDP in 2014 compared to the threshold of -35%). The study highlights the main driving factors that have led to the deterioration of NIIP during the last decade in Romania and the related risks to the financial stability. The comparative analysis of Romania’s NIIP with other EU Member Countries is shaping a picture of external assets and liabilities at the European level that may represent valuable benchmark points for their possible developments. The study found that, considering the strengthening of recent trends, which witnessed a decrease in external indebtedness and in the current account deficits, the net international investment position of Romania may return within the MIP prudential standard. Under the circumstances of a favorable internal and international environment and significant progresses in structural reforms, Romania could make significant steps in order to meet all the required convergence indicators and criteria for Eurozone accession during the next decade.

Suggested Citation

  • Georgescu, George, 2016. "Prospects of Romania’s international investment position and financial stability risks," MPRA Paper 69501, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:69501
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/69501/1/MPRA_paper_69501.PDF
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Rodrik, Dani, 2011. "The Future of Convergence," Scholarly Articles 5131504, Harvard Kennedy School of Government.
    2. Carlos A. Carrasco & Patricia Peinado, 2015. "On the Origin of European Imbalances in the Context of European Integration," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 62(2), pages 177-191.
    3. Dani Rodrik, 2011. "The future of economic convergence," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 13-52.
    4. Horioka, Charles Yuji & Terada-Hagiwara, Akiko & Nomoto, Takaaki, 2015. "Explaining Foreign Holdings of Asia's Debt Securities: The Feldstein-Horioka Paradox Revisited," AGI Working Paper Series 2015-16, Asian Growth Research Institute.
    5. Zaman, Gheorghe & Georgescu, George, 2014. "Romania’s external debt threats," Working Papers of Institute for Economic Forecasting 141215, Institute for Economic Forecasting.
    6. Petr Duczynski, 2012. "On Net External Assets in Developed and Transition Countries," Prague Economic Papers, University of Economics, Prague, vol. 2012(3), pages 636-376.
    7. Georgescu, George, 2013. "Public debt, sovereign risk and sustainable development of Romania," MPRA Paper 57256, University Library of Munich, Germany.
    8. Petr Duczynski, 2012. "On Net External Assets in Developed and Transition Countries," Prague Economic Papers, Prague University of Economics and Business, vol. 2012(3), pages 363-376.
    9. IANCU, Aurel, 2013. "Extending Financialisation and Increasing Fragility of the Financial System," Working Papers of National Institute for Economic Research 130307, Institutul National de Cercetari Economice (INCE).
    10. Zsolt Darvas, 2012. "Intra-euro rebalancing is inevitable but insufficient," Policy Contributions 747, Bruegel.
    11. Gheorghe Zaman & George Georgescu, 2010. "Romania’s External Debt Sustainability Under Crisis Circumstances," Romanian Journal of Economics, Institute of National Economy, vol. 30(1(39)), pages 5-38, June.
    12. Angélique Herzberg, 2015. "Sustainability of External Imbalances," Springer Books, Springer, edition 127, number 978-3-658-07091-5, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zaman, Gheorghe & Georgescu, George, 2018. "Evoluția capitalului în România în secolul 1918-2018 de la Marea Unire la tranziția la economia de piață [Romania’s capital developments during 1918-2018 century from the Great Union to the market ," MPRA Paper 92316, University Library of Munich, Germany.
    2. Georgescu, George, 2016. "The Gross Domestic Product. History, relevance and limitations in its interpretation," MPRA Paper 73644, University Library of Munich, Germany.
    3. MILEA, Camelia, 2017. "A Look At The Evolution And Characteristics Of The Romanian Foreign Debt Over The Past Years," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 21(4), pages 65-81.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nicolas Taconet & Aurélie Méjean & Céline Guivarch, 2020. "Influence of climate change impacts and mitigation costs on inequality between countries," Climatic Change, Springer, vol. 160(1), pages 15-34, May.
    2. Baarsch, Florent & Granadillos, Jessie R. & Hare, William & Knaus, Maria & Krapp, Mario & Schaeffer, Michiel & Lotze-Campen, Hermann, 2020. "The impact of climate change on incomes and convergence in Africa," World Development, Elsevier, vol. 126(C).
    3. Bruno, Giuseppe & De Bonis, Riccardo & Silvestrini, Andrea, 2012. "Do financial systems converge? New evidence from financial assets in OECD countries," Journal of Comparative Economics, Elsevier, vol. 40(1), pages 141-155.
    4. Nassif, André & Morandi, Lucilene & Araújo, Eliane & Feijó, Carmem, 2020. "Economic development and stagnation in Brazil (1950–2011)," Structural Change and Economic Dynamics, Elsevier, vol. 53(C), pages 1-15.
    5. Zaman, Gheorghe & Georgescu, George, 2016. "Stabilitatea financiară a României. Determinanți și proiecții pentru următoarele două decenii [Financial stability in Romania. Determinants and projections for the two next decades]," MPRA Paper 96078, University Library of Munich, Germany.
    6. Deeptha Wijerathna & Jayatilleke S. Bandara & Christine Smith & Athula Naranpanawa, 2014. "Regional disparities in Sri Lanka: an empirical analysis," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 21(2), pages 77-102, December.
    7. Bove, Vincenzo & Gokmen, Gunes, 2020. "Cultural distance and income divergence over time," Economics Letters, Elsevier, vol. 194(C).
    8. de Vries, Gaaitzen J. & Erumban, Abdul A. & Timmer, Marcel P. & Voskoboynikov, Ilya & Wu, Harry X., 2012. "Deconstructing the BRICs: Structural transformation and aggregate productivity growth," Journal of Comparative Economics, Elsevier, vol. 40(2), pages 211-227.
    9. Francesco Lamperti & Clara Elisabetta Mattei, 2016. "Going Up and Down: Rethinking the Empirics of Growth in the Developing and Newly Industrialized World," LEM Papers Series 2016/01, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    10. Kym Anderson & Anna Strutt, 2012. "Agriculture and Food Security in Asia by 2030," Macroeconomics Working Papers 23309, East Asian Bureau of Economic Research.
    11. repec:dgr:rugggd:gd-121 is not listed on IDEAS
    12. Guohua Feng & Jiti Gao & Bin Peng, 2021. "Productivity Convergence in Manufacturing: A Hierarchical Panel Data Approach," Monash Econometrics and Business Statistics Working Papers 16/21, Monash University, Department of Econometrics and Business Statistics.
    13. Luke Deer & Ligang Song, 2012. "China's Approach to Rebalancing: A Conceptual and Policy Framework," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 20(1), pages 1-26, January.
    14. Paul Johnson & Chris Papageorgiou, 2020. "What Remains of Cross-Country Convergence?," Journal of Economic Literature, American Economic Association, vol. 58(1), pages 129-175, March.
    15. Andersson, Martin, 2018. "Resilience to Economic Shrinking: A Social Capability Approach to Processes of Catching up in the Developing World 1951-2016," Lund Papers in Economic History 183, Lund University, Department of Economic History.
    16. Anderson, Kym & Strutt, Anna, 2012. "Asia?s Growth, the Changing Geography of World Trade, and Food Security: Projections to 2030," CEPR Discussion Papers 8950, C.E.P.R. Discussion Papers.
    17. Lekha Chakraborty & Pinaki Chakraborty, 2018. "Federalism, fiscal asymmetries and economic convergence: evidence from Indian States," Asia-Pacific Journal of Regional Science, Springer, vol. 2(1), pages 83-113, April.
    18. Georgescu, George, 2017. "Paradigmele istoriei. Datoria publică a României în ultimii 100 de ani [History paradigms: the public debt of Romania in the last 100 years]," MPRA Paper 82219, University Library of Munich, Germany.
    19. Ramesh Chandra Das, 2019. "Is There Cross-Country Income Convergence Among the BRICS Nations? An Examination," Journal of Infrastructure Development, India Development Foundation, vol. 11(1-2), pages 121-135, June.
    20. Aleksandra Parteka & Joanna Wolszczak-Derlacz, 2015. "Integrated sectors - diversified earnings: the (missing) impact of offshoring on wages and wage convergence in the EU27," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 13(3), pages 325-350, September.
    21. Emelie Rohne Till, 2022. "Is this time different? Social capability and catch‐up growth in Ethiopia, 1950–2020," Journal of International Development, John Wiley & Sons, Ltd., vol. 34(7), pages 1259-1281, October.

    More about this item

    Keywords

    net international investment position; nominal and real convergence; financial stability; MIP Scoreboard; Eurozone accession;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F45 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Macroeconomic Issues of Monetary Unions
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:69501. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.