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Does the Inflation Targeting Have a Positive Role upon the Convergence of the Inflation Rate?

  • Pelinescu, Elena


    (Institute for Economic Forecasting, Bucharest.)

  • Caraiani, Petre

    (Institute for Economic Forecasting, Bucharest)

This article asks whether the monetary regime of inflation targeting that Romania chose is favorable to the inflation convergence with the EU. We analyze a few of the standard models of inflation convergence and apply some of them for the case of Romania. We also use the experience of the other CEE countries to derive lessons for the inflation targeting policy and the convergence process of Romania. We find that the inflation targeting regime supports the inflation convergence and generally the nominal convergence with EU.

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Article provided by Institute for Economic Forecasting in its journal Romanian Journal of Economic Forecasting.

Volume (Year): 3 (2006)
Issue (Month): 3 (September)
Pages: 39-50

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Handle: RePEc:rjr:romjef:v:3:y:2006:i:3:p:39-50
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  15. Orlowski, Lucjan T., 2001. "From inflation targeting to the euro-peg: A model of monetary convergence for transition economies," Economic Systems, Elsevier, vol. 25(3), pages 233-251, September.
  16. M. Taner Yigit & Ali M. Kutan, 2004. "Convergence of Candidate Countries to the European Union," Working Papers 0403, Department of Economics, Bilkent University.
  17. Paul de Grauwe & Gunther Schnabl, 2004. "Nominal versus Real Convergence with Respect to EMU Accession.How to Cope with the Balassa-Samuelson Dilemma," EUI-RSCAS Working Papers 20, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS).
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