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

Author

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  • Pelinescu, Elena

    () (Institute for Economic Forecasting, Bucharest, Romania)

Abstract

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.

Suggested Citation

  • Pelinescu, Elena, 2012. "Transmission Mechanism of Monetary Policy in Romania. Insights into the Economic Crisis," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(3), pages 5-21, September.
  • Handle: RePEc:rjr:romjef:v::y:2012:i:3:p:5-21
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. repec:cmj:journl:y:2013:i:29:cioran is not listed on IDEAS
    2. Olteanu, Dan, 2012. "Monetary Conditions and GDP Evolution in Romania," Working Papers of National Institute of Economic Research 120723, National Institute of Economic Research.
    3. repec:rej:journl:v:16:y:2013:i:47:p:57-74 is not listed on IDEAS
    4. repec:agr:journl:v:2(591):y:2014:i:2(591):p:35-66 is not listed on IDEAS
    5. Dedu, Vasile & Stoica, Tiberiu, 2014. "The Impact of Monetaru Policy on the Romanian Economy," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 71-86, June.
    6. PELINESCU, Elena & SIMIONESCU, Mihaela, 2014. "Modelling And Predicting The Real Money Demand In Romania," Journal of Financial and Monetary Economics, Centre of Financial and Monetary Research "Victor Slavescu", vol. 1(1), pages 117-124.
    7. Zina V.MARCU căs. CIORAN, 2013. "Monetary Policy And The Inflation Targeting Strategy," SEA - Practical Application of Science, Fundația Română pentru Inteligența Afacerii, Editorial Department, issue 2, pages 167-173, October.

    More about this item

    Keywords

    SVAR model; monetary policy transmission mechanism; exchange rate channel;

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation

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