Did the financial crisis bring any changes in the monetary policy preferences of Romania?

Nagy, Ágnes and Benyovszki, Annamária (2014) Did the financial crisis bring any changes in the monetary policy preferences of Romania? Acta Oeconomica, 64 (Supple). pp. 111-131. ISSN 0001-6373

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Abstract

The turbulence in global financial markets presents a serious challenge to the stability of the monetary policy trilemma configuration. The trilemma states that a country may simultaneously choose only two of the following three policy goals: monetary policy independence, exchange rate stability, and financial integration. In order to analyse if the financial crisis brought changes in Romania’s monetary policy preference, we have constructed indexes that measure the trilemma policy goals individually in the period between 2005 and 2012. Using these indices, we have shown that there are significant differences between the means of monetary independence and exchange rate stability indices in the pre- and post-crisis periods.

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