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Transmission Mechanism of Monetary Policy in Romania. Insights into the Economic Crisis

  • Pelinescu, Elena


    (Institute for Economic Forecasting, Bucharest, Romania)

The paper analyzes the monetary policy transmission mechanism in Romania focusing on the exchange rate channel. The analysis is made in the context of an economy described by a mix of institutional and market behaviors illustrated by a SVAR model in which the restrictions imposed on the coefficients underline the adopted behavior hypotheses. The behavior of the four economic variables, as reflected by the SVAR analysis, is consistent with the measures adopted by the National Bank of Romania after the 2008 economic crisis. In this respect, the results underline three main aspects: 1) the importance of the interest rate channel; 2) the key role of demand, and of stimulating the demand through the right economic measures; 3) the complex impact of the exchange rate channel.

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

Volume (Year): (2012)
Issue (Month): 3 (September)
Pages: 5-21

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Handle: RePEc:rjr:romjef:v::y:2012:i:3:p:5-21
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  1. Francesco Giavazzi, 1999. "The Transmission Mechanism of Monetary Policy in Europe: Evidence from Banks’ Balance Sheets," Working papers 99-20, Massachusetts Institute of Technology (MIT), Department of Economics.
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  13. Adam Elbourne & Jakob de Haan, 2004. "Asymmetric Monetary Transmission in EMU: The Robustness of VAR Conclusions and Cecchetti’s Legal Family Theory," CESifo Working Paper Series 1327, CESifo Group Munich.
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