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Monetary Transmission Mechanism Of Interest Rates In Romania

Author

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  • Alina Georgeta, AILINCA

    (National Institute for Economic Research, Romanian Academy)

Abstract

Still haunted by global economic and financial crisis effects, financial instability represents an element with resonance at the macroeconomic level, including at the level of monetary policy pursuits. Risks, vulnerabilities and tensions concerning the monetary and financial stability can come not only from outside, but rather can come from the improper or poor functioning of the monetary mechanism of transmission. Thus, should be considered that a deficient transmission of the impulse of the monetary policy can generate significant tensions, vulnerabilities and even risks and ultimately, financial and monetary instability. In this context, the article¨ aims to examine whether and to what extent the evolution of interest rates from the period 2007-2014 can be considered a source of tensions for the financial and monetary stability by a week transmission between the central bank (National Bank of Romania) and monetary market. Thus, the article analyzes the evolution of interest rates of the Romania’s money market in relation to the policy rate of the National Bank of Romania, but also in relation to macroeconomic fundamentals which interest rates is supposed to influence.

Suggested Citation

  • Alina Georgeta, AILINCA, 2016. "Monetary Transmission Mechanism Of Interest Rates In Romania," Management Strategies Journal, Constantin Brancoveanu University, vol. 33(3), pages 24-31.
    • Handle: RePEc:brc:journl:v:33:y:2016:i:3:p:24-31
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    More about this item

    Keywords

    financial instability; monetary transmission; Romania;
    All these keywords.

    JEL classification:

    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes

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