Inflation Dynamics in Romania - a New Keynesian Perspective

Nicoleta Ciurila and Bogdan Muraraşu ()

European Research Studies Journal, 2008, vol. XI, issue 4, 31-38

Abstract: The objective of this paper is to identify the main factors which drive inflation in Romania: inflation persistence, inflation expectations and real economy variables. We estimate a reduced form hybrid New Keynesian Phillips Curve in order to determine the degree of inertia and the impact of forward looking expectations. As a proxy for real economic activity, we alternatively use the output gap, the unemployment gap, the unit labour cost, the capacity utilization rate and the economic sentiment indicator. We focus on the role of the monetary policy in controlling the various sources of inflation.

Keywords: New Keynesian Phillips Curve; Inflation dynamics; GMM estimation (search for similar items in EconPapers)
JEL-codes: E31 E52 (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (3)

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Journal Article: Inflation Dynamics in Romania – a New Keynesian Perspective (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:ers:journl:v:xi:y:2008:i:4:p:31-38

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