Inflation Targeting as Monetary Policy Strategy in View of Romania’s Adopting Euro as National Currency Cover Image

Inflation Targeting as Monetary Policy Strategy in View of Romania’s Adopting Euro as National Currency
Inflation Targeting as Monetary Policy Strategy in View of Romania’s Adopting Euro as National Currency

Author(s): Valentin Mihai Leoveanu
Subject(s): National Economy, Economic policy, EU-Accession / EU-DEvelopment, Financial Markets, Marketing / Advertising
Published by: Editura Universităţii din Bucureşti
Keywords: inflation; monetary policy; exchange rate; Balassa-Samuelson effect;

Summary/Abstract: On its way towards the European Union accession, Romania had undertaken a multitude of economic transformations that made the transit from the ineffective system of central planning to an institutional framework created to facilitate the functionality of a competitive market economy. Linked to these economic developments, the monetary authority represented by the National Bank of Romania chose some models of monetary policy in order to achieve its fundamental objectives: price stability and financial stability. Nowadays the monetary policy adopted is based on inflation targeting as a main frame of decision and action to reach the objective of adopting euro as national currency in Romania. This paper attempts to focus on the rationale behind the adoption of inflation targeting, the key features, the international experience and the prerequisites on this subject. As a conclusion there are presented the advantages of choosing this type of monetary policy on the further developments towards euro adopting in Romania.

  • Issue Year: 2008
  • Issue No: 08
  • Page Range: 72-76
  • Page Count: 5
  • Language: English