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A Liniar Model Of Analyzing Inflation In Romania, Bulgaria, Turkey And Croatia

Author

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  • Zapodeanu Daniela

    () (Universitatea din Oradea, Stiinte Economice)

  • Gavris Natalia

    (Universitatea din Oradea, Stiinte Economice)

  • Leac Dafina Roxana

    (Universitatea din Oradea, Stiinte Economice)

  • Teudan Ana - Maria

    (Universitatea din Oradea, Stiinte Economice)

Abstract

The study uses a linear model that reviews the connection between inflation rate and a few macroeconomic indicators: Harmonized Index of Consumer Prices (HICP), Gross Domestic Product (GDP) and unemployment (Unempl). The purpose of this study is to discover the influence of these macroeconomic indicators on the inflation rate, taking into consideration a period of ten years: 2000-2010. The analysis approaches this issue from the perspective of two EU member countries: Bulgaria, Romania, and another two countries - EU candidates: Turkey and Croatia. Although the tradeoff between inflation and unemployment has been long discussed, starting with the famous idea of the Phillips curve that has evolved during time (M.Friedman, E.Phelps), economists are still studying this theme in order to find satisfactory explanation for it. In this paper we have tried to find out whether, in the analyzed countries, there is a strong tradeoff between inflation and unemployment, but we also added other variables that influence inflation: the gross domestic product and the previous values of inflation. Our paper started with a study of the economic background of each analyzed country then, we have collected quarterly data from the period of 2000-2010, that we processed using the econometric software Gretl. After building several models for each country we concluded that inflation in Romania and Croatia are influenced by the following variables: GDP and previous HICP, while the values of inflation in the other two countries are affected by more diverse range of independent variables.

Suggested Citation

  • Zapodeanu Daniela & Gavris Natalia & Leac Dafina Roxana & Teudan Ana - Maria, 2011. "A Liniar Model Of Analyzing Inflation In Romania, Bulgaria, Turkey And Croatia," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(2), pages 445-451, December.
  • Handle: RePEc:ora:journl:v:1:y:2011:i:2:p:445-451
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    File URL: http://anale.steconomiceuoradea.ro/volume/2011/n2/062.pdf
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    References listed on IDEAS

    as
    1. Maruška Vizek & Tanja Broz, 2009. "Modeling Inflation in Croatia," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 45(6), pages 87-98, November.
    2. Cagatay Telli & Ebru Voyvoda & A. Erinç Yeldan, 2009. "A General Equilibrium Assessment of Twin-Targeting in Turkey," Chapters,in: Beyond Inflation Targeting, chapter 10 Edward Elgar Publishing.
    3. Gerald Epstein & A. Erinç Yeldan, 2009. "Beyond Inflation Targeting: Assessing the Impacts and Policy Alternatives," Chapters,in: Beyond Inflation Targeting, chapter 1 Edward Elgar Publishing.
    4. Agenor, Pierre-Richard & Jensen, Henning Tarp & Verghis, Mathew & Yeldan, Erinc, 2006. "Disinflation, fiscal sustainability, and labor market adjustment in Turkey," Policy Research Working Paper Series 3804, The World Bank.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    : Inflation; Harmonized Index of Consumer Prices; Gross Domestic Product; Unemployment; Monetary policy;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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