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The Impact of Capital Account Liberalization on Romanian Financial Account

Author

Listed:
  • Ioan Alin NISTOR
  • Maria-Lenuta ULICI
  • Anca NAN

    (“Babes-Bolyai” University, Cluj Napoca)

Abstract

Capital account liberalization is a complex process and its success requires proper sequencing and coordination with macroeconomic and other policies. Reflecting varying approaches and initial conditions, some countries have been able to liberalize their capital accounts while successfully maintaining financial sector stability, whereas other countries have experienced financial crises. In this paper, we analyze the impact of liberalization process, foreign currency, inflation and interest rate on Romanian financial account during April 2005- April 2008, respectively April 2005- January 2011. We find that liberalization process had a negative impact on financial account in both samples. Foreign currency has a negative impact in the first sample and positive in the second sample, while the other variables have a positive impact in both samples.

Suggested Citation

  • Ioan Alin NISTOR & Maria-Lenuta ULICI & Anca NAN, 2011. "The Impact of Capital Account Liberalization on Romanian Financial Account," Finante - provocarile viitorului (Finance - Challenges of the Future), University of Craiova, Faculty of Economics and Business Administration, vol. 1(13), pages 125-132, December.
    • Handle: RePEc:aio:fpvfcf:v:1:y:2011:i:13:p:125-132
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    References listed on IDEAS

    as
    1. Sebastian Edwards, 2001. "Capital Mobility and Economic Performance: Are Emerging Economies Different?," NBER Working Papers 8076, National Bureau of Economic Research, Inc.
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    More about this item

    Keywords

    capital account liberalization; financial stability; inflation; foreign currency;

    JEL classification:

    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
    • E69 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Other

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