Interest Rates and Economic Growth in Romania: Is There Cointegration?

Chiriluş Alexandru I. ()
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Chiriluş Alexandru I.: The Bucharest University of Economic Studies, Romania.

Journal of Social and Economic Statistics, 2022, vol. 11, issue 1-2, 132-143

Abstract: This study aims to investigate the potential existence of a cointegration relationship between Romania’s gross domestic product (GDP), credit interest rates charged by financial institutions, and the benchmark interest rate set by the National Bank of Romania (NBR). The identification of a long-term relationship between these variables is considered to be of significant importance as it may provide a deeper understanding of the interactions between interest rates and GDP dynamics in Romania. To achieve this objective, we employed a robust econometric methodology, utilizing well-established and widely-used techniques for capturing long-term statistical relationships. Careful consideration was given to the manipulation of macroeconomic data in order to ensure the validity and reliability of the analysis. The results of our analysis reveal that there is no statistically significant evidence of a long-term relationship between GDP, credit interest rates, and the benchmark rate set by the NBR. This finding suggests that the interaction between interest rates and GDP in Romania is complex and may be influenced by other variables. Further research should focus on these other factors in order to gain a more comprehensive understanding of the relationship between GDP, credit interest rates and benchmark rate set by NBR.

Keywords: Interest rates; Economic Growth; Credit (search for similar items in EconPapers)
JEL-codes: C01 C87 E00 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:jsesro:v:11:y:2022:i:1-2:p:132-143:n:1

DOI: 10.2478/jses-2022-0008

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