The Dynamics of the Adjustment Mechanisms to Macroeconomic Shocks. An Analysis from the Perspective of the Establishment of the Central Parity at Euro Zone Accession
PNCDI2 TE 334, 2010-2013
586,650 RON (132,000 EUR)
- Ionut Dumitru, PhD
- Elena Bojesteanu, PhD stud.
- Nicoleta Ciurila, PhD stud.
- Bogdan Murarasu, PhD stud.
The motivation of the Project resides in a better theoretical and empirical understanding of the mechanisms through which domestic and external shocks are accommodated in the New Member States (NMS), particularly in Romania.
The subject of the Project is extremely important in the view of Romania's commitment to adopt the Euro until 2014-2015, as in that moment monetary policy independence and exchange rate flexibility through the establishment of the central parity will be lost, making a part of the economic adjustment mechanisms unusable.
The central objective of the Project is the study of the adjustment mechanisms to various shocks, especially highlighting the role that the exchange rate has. The research will be structured in three main directions:
the analysis of the influence that the exchange rate has on the nominal and real convergence criteria;
the estimation of an optimal level of the central parity in the moment of the participation to the
Exchange Rate Mechanism (ERM) II and the possible consequences on inflation, the current account deficit,
external competitiveness and real convergence;
the identification of the variables thorough which adjustment mechanisms will function after the establishment
of the central parity and the loss of monetary policy independence will take place.
All these topics are essential for an optimal establishment of economic policies on the road to Euro adoption.
The originality of the Project resides in the comparative approach of the adjustment mechanisms in the context
of Euro Area accession for Romania and the other New Member States (NMS) as well as in the subjects considered
and the analysis techniques applied, all with a high degree of novelty for Romanian financial and monetary research.
Estimating the exchange rate pass-through into inflation.
The Harrod-Balassa-Samuelson effect and its impact on the nominal and real convergence.
The establishment of the central parity for the adoption of Euro. The estimation of the equilibrium real exchange rate for the Romanian economy.
The role of the real exchange rate in insuring international competitiveness.
The estimation of the current account sustainability - adjustment mechanisms.
The influence of regional factors on EUR/RON exchange rate developments.
Bojesteanu, E. & S. Manu (2013) "Empirical analysis of business cycle synchronization
and shock similarity between Romania and the Euro Zone,"
Emerging Markets Finance and Trade
AEFR - Working Paper Series