DISINFLATION AND MONETARY POLICY ARRANGEMENTS IN ROMANIA

Daniel Daianu () and Ella Kallai ()

No wp789, William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan

Abstract: Disinflation has been pursued successfully in Romania in recent years. Inflation came down from over 40 per cent in 2001 to 14 per cent in 2003 and is expected to be cca 9.5 per cent in 2004. By 2007 it should come down to around 3%. The benefits of a lowinflation environment are unquestionable, as price stability is the ultimate objective of monetary policy. In addition, low inflation is a pre-condition for EU accession. There only remains the other critical question, namely, what is the proper strategy to achieve the ultimate objective. Different central banks have adopted strategies which place different emphasize on the various pieces of information, or elements of their decision-making process or different aspects of their communication policies. Inflation targeting (IT) is one of those strategies.

Keywords: inflation-targeting; transition economy; EU accession (search for similar items in EconPapers)
JEL-codes: E52 F41 P44 (search for similar items in EconPapers)
Pages: pages
Date: 2005-11-01
New Economics Papers: this item is included in nep-cba, nep-cwa, nep-mac, nep-mon and nep-tra
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