THREATS TO MACROECONOMIC STABILITY UNDER THE IMPACT OF INTERNATIONAL CAPITAL MOVEMENT

Victoria Iordachi (), Stela Ciobu () and Dorina Clichici ()
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Victoria Iordachi: INCE
Stela Ciobu: Academy of Economic Studies of Moldova

Economy and Sociology, 2018, issue 1, 62-68

Abstract: One of the most interesting issues that provoke controversial disputes is the impact of financial flows on the evolution of the states as a whole and economic growth of developing economies. The process of capital movement between countries cannot be stopped and it must be managed efficiently in order to obtain economic benefits and minimize the risks related to macroeconomic stability. The purpose of this study is to identify and analyze the effects of capital inflows on the macroeconomic stability of the Republic of Moldova. The research was based on the following methods: analysis and synthesis, induction and deduction, graphical and tabular methods, methods inherent in economic disciplines – observation, reasoning, comparison, classification, grouping; systemic methods and static analysis. As a result of the research, it is concluded that imprudently regulated capital inflows, in spite of their obvious advantages, could pose a serious threat to macroeconomic stability and external competitiveness, generating overheating of the economy, if their volume exceeds its ability to absorb them. However, the analysis depicts that remittances inflows have positively influenced so far, the economic development of the Republic of Moldova

Keywords: financial flows; macroeconomic stability; monetary policy; remittances; capital volatility; shadow economy (search for similar items in EconPapers)
JEL-codes: E44 E60 F21 F32 (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:aat:journl:334

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