THE DIFFICULT TASK OF MAINTAINING CREDIBILITY

Lucian Croitoru and Cornel Tarhoaca
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Cornel Tarhoaca: The National Bank of Romania, Bucharest

Journal for Economic Forecasting, 2003, issue 1, 5-14

Abstract: The study investigates whether the trend of declining targeted depreciation and diminution in the interest rates and inflation will continue in 2003, given the fact that the relatively high surplus on the forex market led in 2001 and 2002 towards real appreciation of ROL against the EUR-USD basket, thus decreasing inflation. In the situation of a negatively sloped balance of payments line, the Central Bank macroeconomic policy mix has to include a contractionary budgetary policy and the relaxation of the monetary policy, situation in which the strong economic trend may continue.

Keywords: monetary policy; balance of payment; income effect; trade effect; policy mix (search for similar items in EconPapers)
JEL-codes: E52 E58 F32 (search for similar items in EconPapers)
Date: 2003
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Persistent link: https://EconPapers.repec.org/RePEc:rjr:romjef:v::y:2003:i:1:p:5-14

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