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An Analysis of the Fluctuations in the Romanian Economy using the Real Business Cycles Approach

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  • Caraiani, Petre

    (Institute of Economic Forecasting, Romanian Academy)

Abstract

In this paper I calibrate and simulate the standard Real Business Cycles model for the Romanian economy. In this respect, I use a set of estimated data for capital stock and GDP at quarterly frequency for the period 1991-2002. The results show that the standard RBC can be a starting point for simulating the macroeconomic dynamics in the Romanian economy. Standard deviations in the simulated model are close to those in the real economy, except for consumption. Correlations for most of the simulated variables are in a close range to those of the real variables, except again for consumption. There are also some results specific to the Romanian economy, as capital is moderately procyclical and consumption is more volatile than output.

Suggested Citation

  • Caraiani, Petre, 2007. "An Analysis of the Fluctuations in the Romanian Economy using the Real Business Cycles Approach," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 4(2), pages 76-86, June.
    • Handle: RePEc:rjr:romjef:v:4:y:2007:i:1:p:76-86
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    File URL: http://www.ipe.ro/rjef/rjef2_07_7/
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    References listed on IDEAS

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    6. Caraiani, Petre, 2004. "Nominal And Real Stylized Facts Of The Business Cycles In Romanian Economy," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 1(4), pages 121-132, December.
    7. Lawrence H. Summers, 1986. "Some skeptical observations on real business cycle theory," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 10(Fall), pages 23-27.
    8. Dobrescu, Emilian, 1996. "Macromodels of the Romanian transition Economy," MPRA Paper 35810, University Library of Munich, Germany.
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    10. Agenor, Pierre-Richard & McDermott, C John & Prasad, Eswar S, 2000. "Macroeconomic Fluctuations in Developing Countries: Some Stylized Facts," The World Bank Economic Review, World Bank, vol. 14(2), pages 251-285, May.
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    Cited by:

    1. Petre Caraiani, 2009. "An Estimation of Output Gap in Romanian Economy Using the DSGE Approach," Prague Economic Papers, Prague University of Economics and Business, vol. 2009(4), pages 366-379.
    2. Purica, Ionut & Caraiani, Petre, 2009. "Second Order Dynamics Of Economic Cycles," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 6(1), pages 36-47, March.
    3. Jula, Dorin & Jula, Nicolae Marius, 2009. "Regional Economic Voting In Romania," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 6(1), pages 5-15, March.

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    More about this item

    Keywords

    real business cycles; total factor productivity; transition economies;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications

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