Alternative view of falling inflation in Romania

Starting with August this year NBR is forecasting lower and lower inflation. The latest forecast puts inflation at 1.9% in 1Q2012, at 2.3% in 2Q2012 and at 2.8% in 2013. During this period inflation reaches 3.8% in 3Q2012 and then stabilizes around 3%. Everyone in Romania should celebrate these numbers. Before we bring out the champagne I have two question.
What happened to the Ballasa-Samuelson effect?
Could the 50% cut in potential GDP explain these inflation numbers? Continue reading “Alternative view of falling inflation in Romania”


Remember, remember October 2008…

This is the month that marks the beginning of the current economic slump in recent Romanian economic history.  At that time a multitude of theories were thrown around for who’s to blame and what were the right reactions in times of crisis.

Thus there are two research teams deriving from that situation and I will do my best to shed some light on them: how we got to 2008 and policy reactions to the 2008 negative external shock. There is no particular order in which I will “attack” the two subject, it all depends on which part of the research moves faster.

The format will be simple, in this page you will find links to new research as I complete it.  I welcome any research on those subjects done by anyone.  To me, uncovering as much as possible of the truth regarding that episode is similar to understanding the Great Recession in the US.

The first research that looked at this issue came from Lucian Croitoru at National Bank of Romania. Unfortunately the paper is in Romanian and it cannot receive the proper peer review. This paper promoted a discussion in the media where I presented (video here) my first perspective on the issue.

But this is a too interesting and important of a topic to leave it here.