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A Statement of the Reaching Inflation Target upon Price Stability in Romania

Author

Listed:
  • Larisa PREDA

    (Valahia University of Targoviste, Romania)

  • Elena Violeta DRAGOI

    (Valahia University of Targoviste, Romania)

  • Lucretia Mariana CONSTANTINESCU

    (Valahia University of Targoviste, Romania)

Abstract

Price stability contributes to financial stability because it eliminates the market distortions and uncertainties which may occur at the markets’ level as a result of the price instability. Price stability can reduce the level of risk premiums in interest rates because it lowers the degree of uncertainty that is associated with future inflation.

Suggested Citation

  • Larisa PREDA & Elena Violeta DRAGOI & Lucretia Mariana CONSTANTINESCU, 2015. "A Statement of the Reaching Inflation Target upon Price Stability in Romania," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 2, pages 34-41.
    • Handle: RePEc:ddj:fseeai:y:2015:i:2:p:34-41
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    References listed on IDEAS

    as
    1. Adam, Klaus, 2007. "Optimal monetary policy with imperfect common knowledge," Journal of Monetary Economics, Elsevier, vol. 54(2), pages 267-301, March.
    2. Hemantha K.J. Ekanayake, 2012. "The Link Between Fiscal Deficit and Inflation: Do public sector wages matter?," ASARC Working Papers 2012-14, The Australian National University, Australia South Asia Research Centre.
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