Preliminary communication

RESPONSE OF OUTPUT IN ROMANIA TO MACROECONOMIC POLICIES AND CONDITIONS

Yu Hsing
Wen-jen Hsieh

Abstract

This paper incorporates the monetary policy function and uncovered interest parity in examining the impacts of changes in major macroeconomic variables on real GDP in Romania. A lower ratio of government consumption spending to GDP, an appreciation of the expected real effective exchange rate, a lower world real interest rate, more world output, and a lower inflation rate would raise real GDP. Hence, fiscal prudence is needed, and the conventional approach of real depreciation to stimulate exports and raise real output does not apply to Romania.

Keywords

Inflation targeting; monetary policy function; uncovered interest parity; fiscal policy; real appreciation or depreciation

Hrčak ID:

47318

URI

https://hrcak.srce.hr/47318

Publication date:

15.9.2009.

Article data in other languages: croatian

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