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Disinflation And Monetary Policy Arrangements In Romania

Author

Listed:
  • Daniel Daianu
  • Ella Kallai

Abstract

Disinflation has been pursued successfully in Romania in recent years. Inflation came down from over 40 per cent in 2001 to 14 per cent in 2003 and is expected to be cca 9.5 per cent in 2004. By 2007 it should come down to around 3%. The benefits of a lowinflation environment are unquestionable, as price stability is the ultimate objective of monetary policy. In addition, low inflation is a pre-condition for EU accession. There only remains the other critical question, namely, what is the proper strategy to achieve the ultimate objective. Different central banks have adopted strategies which place different emphasize on the various pieces of information, or elements of their decision-making process or different aspects of their communication policies. Inflation targeting (IT) is one of those strategies.

Suggested Citation

  • Daniel Daianu & Ella Kallai, 2005. "Disinflation And Monetary Policy Arrangements In Romania," William Davidson Institute Working Papers Series wp789, William Davidson Institute at the University of Michigan.
    • Handle: RePEc:wdi:papers:2005-789
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    More about this item

    Keywords

    inflation-targeting; transition economy; EU accession;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • P44 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - National Income, Product, and Expenditure; Money; Inflation

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