Romania: Selected Issues

May 25, 2017

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Format: Chicago

Romania: Selected Issues, (USA: International Monetary Fund, 2017) accessed December 26, 2024

Summary

This Selected Issues paper estimates a small open economy model that makes it possible to quantify the relative strength of the trade and financial channels in Hungary, Poland. and Romania. The Bayesian results indicate that both the trade and financial channels are strongest for Romania, possibly owing to the expansion of financial balance sheets and lower integration into global supply chains. For all countries, tighter domestic monetary conditions result in reduction of output and currency appreciation, although the magnitude of appreciation is less in Romania compared with peers. The trade channel is also dominant in the transmission of foreign monetary policy shocks, which result in output losses and currency depreciation.

Subject: Central bank policy rate, Currencies, Expenditure, Financial sector policy and analysis, Financial services, Money, Public investment and public-private partnerships (PPP), Public investment spending, Solvency

Keywords: Central bank policy rate, CR, Currencies, Currency depreciation, Eastern Europe, EU funds, EU grant, EU investment funding, Europe, Exchange rate, Global, Interest rate, ISCR, Public investment and public-private partnerships (PPP), Public investment spending, Solvency, Trade channel

Publication Details

Pages:

74
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2017/134
Stock No:

1ROUEA2017002
ISBN:

9781484301586
ISSN:

1934-7685

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