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Comparing Monetary Policy Rules in the Romanian Economy: A New Keynesian Approach


  • Caraiani, Petre

    () (Institute for Economic Forecasting, Romanian Academy)


A New Keynesian model of open economy is estimated and discussed in the case of Romania. The model is estimated using quarterly data on a post-2000 sample. The paper focuses on the monetary policy analysis and compares several specifications for the monetary policy within the Bayesian framework. The issue whether the National Bank reacts to the exchange rate is also discussed.

Suggested Citation

  • Caraiani, Petre, 2011. "Comparing Monetary Policy Rules in the Romanian Economy: A New Keynesian Approach," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(4), pages 30-46, December.
  • Handle: RePEc:rjr:romjef:v::y:2011:i:4:p:30-46

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    References listed on IDEAS

    1. Guillermo A. Calvo & Carmen M. Reinhart, 2002. "Fear of Floating," The Quarterly Journal of Economics, Oxford University Press, vol. 117(2), pages 379-408.
    2. Laurence M. Ball, 1999. "Policy Rules for Open Economies," NBER Chapters,in: Monetary Policy Rules, pages 127-156 National Bureau of Economic Research, Inc.
    3. repec:ebl:ecbull:v:5:y:2007:i:3:p:1-11 is not listed on IDEAS
    4. Lubik, Thomas A. & Schorfheide, Frank, 2007. "Do central banks respond to exchange rate movements? A structural investigation," Journal of Monetary Economics, Elsevier, vol. 54(4), pages 1069-1087, May.
    5. Clarida, Richard & Gali, Jordi & Gertler, Mark, 1998. "Monetary policy rules in practice Some international evidence," European Economic Review, Elsevier, vol. 42(6), pages 1033-1067, June.
    6. Eschenhof, Sabine, 2009. "Comparing monetary policy rules in a small open economy framework: An empirical analysis using Bayesian techniques," Darmstadt Discussion Papers in Economics 197, Darmstadt University of Technology, Department of Law and Economics.
    7. Juan Paez-Farrell, 2007. "Understanding monetary policy in Central European countries using Taylor-type rules: the case of the Visegrad four," Economics Bulletin, AccessEcon, vol. 5(3), pages 1-11.
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    Cited by:

    1. Caraiani, Petre, 2013. "Comparing monetary policy rules in CEE economies: A Bayesian approach," Economic Modelling, Elsevier, vol. 32(C), pages 233-246.
    2. Bogdan BĂDESCU, 2015. "A study of the impossible trinity in Romania," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(2(603), S), pages 199-214, Summer.
    3. repec:agr:journl:v:2(602):y:2015:i:2(602):p:199-214 is not listed on IDEAS
    4. Iulian Vasile Popescu, 2014. "The impact of the recent global crisis on the prioritization of central banks final objectives. A structural approach in the context of Central and Eastern European states," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Eastern Macedonia and Thrace Institute of Technology (EMATTECH), Kavala, Greece, vol. 7(2), pages 51-76, September.

    More about this item


    New Keynesian models; small open economy; monetary policy; Taylor rules; Bayesian methods;

    JEL classification:

    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy


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