IDEAS home Printed from https://ideas.repec.org/a/cmj/networ/y2014i4p161-172.html
   My bibliography  Save this article

The Relationship Between Inflation And The Main Macroeconomic Variables In Romania

Author

Listed:
  • Ionuţ Cristian BACIU

    (Alexandru Ioan Cuza University, Iaşi)

Abstract

The inflation is considered an important economic phenomenon that adversely affects the economy of a state. The purpose of this study is to highlight the significant statistical connections between the inflation rate and the main macroeconomic variables influencing the inflationary phenomenon (money supply, the monthly net average nominal wage, exchange rate, reference interest rate), depending on the monetary policy strategy adopted by the National Bank of Romania. The research is conducted using monthly data for the period June 1997 – December 2013, with the explorative method of Principal Components Analysis. The results indicate the fact that for the period June 1997 – July 2005, the inflation rate is strongly correlated with the growth rate of monthly net average nominal wage, while for the period after the adoption of the direct targeting regime in August 2005, it is observed a strong link between the inflation rate and the reference interest rate.

Suggested Citation

  • Ionuţ Cristian BACIU, 2014. "The Relationship Between Inflation And The Main Macroeconomic Variables In Romania," Network Intelligence Studies, Fundația Română pentru Inteligența Afacerii, Editorial Department, issue 4, pages 161-172, November.
  • Handle: RePEc:cmj:networ:y:2014:i:4:p:161-172
    as

    Download full text from publisher

    File URL: http://seaopenresearch.eu/Journals/articles/NIS_4_4.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Roberto Golinelli & Renzo Orsi, 2002. "Modelling Inflation in EU Accession Countries: The Case of the Czech Republic, Hungary and Poland," Eastward Enlargement of the Euro-zone Working Papers wp09, Free University Berlin, Jean Monnet Centre of Excellence, revised 01 Aug 2002.
    2. Steven B. Kamin & Marc Klau, 2003. "A multi-country comparison of the linkages between inflation and exchange rate competitiveness," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 8(2), pages 167-184.
    3. Jose Manuel Campa & Linda S. Goldberg, 2002. "Exchange rate pass-through into import prices: a macro or micro phenomenon?," Staff Reports 149, Federal Reserve Bank of New York.
    4. Budina, Nina & Maliszewski, Wojciech & de Menil, Georges & Turlea, Geomina, 2006. "Money, inflation and output in Romania, 1992-2000," Journal of International Money and Finance, Elsevier, vol. 25(2), pages 330-347, March.
    5. Amit Kara & Edward Nelson, 2003. "The Exchange Rate and Inflation in the UK," Scottish Journal of Political Economy, Scottish Economic Society, vol. 50(5), pages 585-608, November.
    6. Pelinescu Elena, 2006. "Modelarea inflaţiei în România," Revista OEconomica, Romanian Society for Economic Science, Revista OEconomica, issue 01, March.
    7. Capraru Bogdan & Ihnatov Iulian, 2011. "External Factors Influence On Inflation: The Case Of Romania," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 469-475, July.
    8. Vasile Dedu & Bogdan Andrei Dumitrescu, 2009. "Underlying Factors Of Persistent Inflation In Romania," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(11), pages 1-38.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Principal component analysis; Inflation rate; Reference interest rate; Price stability;

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

    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:cmj:networ:y:2014:i:4:p:161-172. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Serghie Dan). General contact details of provider: http://bxb.ro/ .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.