The Impact of Capital Flows on the Real Exchange Rate: the Case of Romania

Angela Roman, Ghita-Mitrescu Silvia () and Sadoveanu Diana
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Ghita-Mitrescu Silvia: „Ovidius” University from Constanta
Sadoveanu Diana: „Alexandru Ioan Cuza” University of Iasi, Romania Faculty of Economics and Business Administration

Ovidius University Annals, Economic Sciences Series, 2014, vol. XIV, issue 1, 188-193

Abstract: This paper examines the influence of the capital flows on the real exchange rate of the Romanian leu against euro. Many studies which are analysing the fundamental determinants of the exchange rate of the leu, show that the appreciation of the currency, before the financial crises from the last years, was due to the real convergence of the Romanian economy. In our study we have showed that the capital account contributed to the appreciation of the leu, rather than the influence of the Harrod-Balassa-Samuelson effect. We found a long-run relationship among the real exchange rate, foreign direct investments and workers remittances from abroad

Keywords: Capital flows; real exchange rate; Harrod-Balassa-Samuelson effect; Johansen cointegration (search for similar items in EconPapers)
JEL-codes: C10 F31 F32 (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:ovi:oviste:v:xiv:y:2014:i:1:p:188-193

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