the study of indicators of the economic growth at the level or romanian economy

7/28/2019 The study of indicators of the economic growth at the level or romanian economy

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The study of indicators of the

economic growth at the level

of romanian economy

The aim of the paper is to study the aspects of economic growth - as development support

for a country, and to present the causes which generate the cycles in the evolution of the

economic growth rhythm. The theoretical analysis is supported with examples of the classic

models, the data thereof being offered by the National Bank of Romania, the National

Commission of Statistics, Reports of international structures concerning Romania, i.e.

Furthermore, there is an analysis of the monetary mass depending on the GDP and the

interest rate as well as a description of the monetary policy the National Bank of Romania has

chosen to pursue.

The new monetary policy the National Bank has adopted aims directly at inflation which

implies the recognition of the importance of the inflationist phenomenon in modern economiesand, implicitly, that the most efficient way for the monetary policy to sustain the general desire

of a long-term economic growth is to secure price stability.

Key words: macroeconomy, macroeconomic policies, GDP, consumption,

monetary mass, investments, inflationary economy

Stelian STANCU9 9Maria STANCU 9

Marilena STANCU Gabriela SAVA9 9 9

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1. The economic growth influence the aggregate demand, and

Starting with the fact that economic is consequently the economic growth.

represented by the growth of the national - expectations - what companies

revenue, there are several variants of expect to occur on the macroeconomic

measuring the national revenue. Still, the level is highly relevant. For instance, if

most widely used variant is by means of they expect a more relaxed growth rate,

the GDP. Hence, growth will be they can postpone their investment

measured as a percentage growth of the plans. Should they postpone investment

GDP as taking into account the value of plans, the aggregate demand decreases

the real GDP modification is of an affecting the economic growth rate.

outmost importance. Nonetheless, the effects of the

Moreover, the economic growth economic growth are not always

follows the pattern of the economic cycle positive as it implies certain costs, somestages, that is during the expansion of which are discussed below:

periods, the growth id more accelerated - unequal incomes - growth

whereas during recession, such growth distributes benefits unequally. Most

rate slower. often than not, it compensates the strong

On the other hand, there are multiple and offers very little to low rated

causes generating these cycles within the entrepreneurs. This effect widens the

evolution of the economic growth rate, income revenue distribution within the

namely: economy.

- random shocks - unforeseen events - pollution (and other negative

which occur having an major effect on the externalities) - the race toward a high

economy, such as the September 11 output tends to increasingly leave itsattack, the Iraq crises, etc., to mention marks on the environment. Hence,

only a few. higher and higher levels of pollution are

- politically induced causes - recorded whether in the air, water,

politicians are notorious for their opting sound, etc.

for policies to kick-start economic - loss of non-renewable resources -

growth. Ironically enough, such policies the higher the desire to increase

are generally adopted shortly before or production, the higher the quantities of

even election campaigns. Such policies resources used; the speed of resources

entail booms which force the elected use is inverse proportionally to their life.

government to slow down the growth - loss of land - an increased output

rate in order to avoid high inflation. constantly lays pressure on available

- imported cycles - should the land, which can gradually affect

outside world develop in cycles, it affect available land in rural areas.

Romania's economy accordingly. - changes in lifestyle - the economic

Exports wil l fluctuate whi ch growth also lays a high pressure on

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individuals, which means higher costs - technical progress - this is

for family and social life. probably the most obvious and largely

The economic growth relies on accepted source of economic growth and

some fundamental premises as an is due to the fact that new technology

economy can grow only if appropriate allows for the production of an

conditions are created. The growth increasingly larger quantities of goods

heavily depends on the country's with the same resources.

resources: the higher the quantity and the

quality of the resources, the more 2. Study of GDP evolution in

favoured the economic growth. Romania

In this context, the sources of In the analysis suggested, data

growth include: from the Romanian Statistic Directory

- natural resources - a larger amount (in nominal value) were used for aof natural resources as well as human period of ten years, from 1995 to 2004.

ones, as they latter need to exploit them, For an efficient analysis of data at the

can lead to the economic development; Romanian economy level, we deduce

- capital - more capital means more the linear tre nd of consumption

production, and more production means depending on the GDP as well as

growth. To obtain the capital, one needs investment trend depending on the

investments, mainly investments in interest rate.

cutting edge productive equipment; The next table presents a forecast of

- saving rate - the more is saved the GDP evolution over the period 2005-

today, the large the available future 2025:

resources.

Year Rate of growth (%) Rate of appreciation in real

terms towards the euro (%)

GDP

(billion euro)

2004 7.6 8 55

2005 5.3 3 59.6

2006 5.3 3 64.7

2007 5.4 3 70.2

2008 5.6 3 76.3

2009 5.4 3 82.8

Figure 1

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To highlight this foresight, a tion of tax rates by increasing the

budgetary plan has be en carr ied ta x ba si s an d st rengt he ning ta x

according to which: collection;The growth of budgetary revenue - the complete removal of arrears

from 30% to 40% of the GDP depends on: to the Budget (some 4% of the GDP);

- the compensation of the reduc- - at least partial taxation of some

2010 5.4 3 89.9

2011 5.4 3 97.6

2012 5.4 3 106.0

*2013 5.5 0 111.8

2014 5.5 0 118.0

2015 5.5 0 124.4

2016 5.5 0 131.3

2017 5.5 0 138.5

2018 5.5 0 145.1

2019 5.6 0 154.3

2020 5.7 0 163.1

2021 5.6 0 172.3

2022 5.5 0 181.7

2023 5.4 0 191.5

2024 5.4 0 201.9

2025 5.4 0 212.8

Year Rate of growth (%) Rate of appreciation in realterms towards the euro (%)

GDP(billion euro)

* in the hypothesis of joining the euro area in 2013 (National Bank ofRomania)

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of the workers opting to shift from self- objective of the monetary policy and

contained farming to productive ranking on secondary levels the

activities; traditional objectives (economic growth,

- land taxation; increased competitivity abroad, cove-

- surfacing some of the under- ring fiscal deficits or lowering the

ground economy (a further 4% of the unemployment rate);

GDP). - transparency of the monetary

securing an economic growth rate policy by communicating the objectivesof over 5% per annum, for two decades; and decisions made with respect to the

the increase of the absorption monetary policy to the public;capacity of EU funds; - increase of the Central Bank

the capacity of the consolidate Budget to responsibility by meeting the inflation

generate co-funding of some 1% of the target;GDP per annum, provided that the fiscal - dependency on the on time

deficit does not exceed 3% of the GDP. provision of a full set of data concerning

variables relevant to all four macro-

3. Analysis of money stock and economic blocks (real, monetary, fiscal,

monetary policies extern).

To continue, we present an analysis The inflation-targeting regime

of the monetary mass according to the allows the monetary policy to focus on

GDP and the interest rate, and a aspects of the domestic financial

description of the monetary policy environment and a better response to

undertaken by the National Bank of shocks in the national economy. The

Romania (Appendix 3). money - inflation relationship is not theThe National Bank of Romania has defining element of the strategy, but it

recently undertaken as its policy to target stands for a favourable condition to

directly the inflation. Such policy determine appropriately the instru-

acknowledges the significance of the ments the monetary body opts for.

inflationist phenomenon in modern The current strategy of the Central

economies as well the fact that price Bank includes elements such as:

stability represents the most efficient - disinflation-centeredness;

way a monetary policy can sustain the - exchange rate flexibility;

overall desire of long-term economic - the significant role of the

growth. monetary aggregateswhich can also be

The strategy of direct targeting the found within the framework of the

inflation displays the following defining direct targeting of inflation.

features: Moreover, while assimilating some

- undertaking unequivocally the elements of targeting the inflation in the

commitment to price stability as the main monetary strategy, the Central Bank ahs

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to initiate legal measures necessary to inflation foresights, generally conducted

formally adopt the new regime. by means of econometric models.

It is also imperative to make some The following figure presents the

decisions with concern to price index as evolution of the monetary mass, the

basis for determining the inflation target. GDP, and the interest rate over the last

Within the monetary strategy analysed in decade.

this paper, an essential role is played by

Figure 1

BIBLIOGRAPHY

1. Dobrescu E., Tranziia n Romnia-Abordri econometrice, Editura Economic,

Bucharest: 2002;

2. Stancu S.,Nucleul unei economii de pia. Existena echilibrului n condiii imperfecte -

Tez de doctorat, Bucharest: 1996;3. Andrei T., Stancu S., Pele D.T., Statistic - teorie i aplicaii, EdituraEconomic,Bucharest: 2002;

4. Stancu S.Competiia pe pia i echilibrul economic-teorie i apicaii, EdituraEconomic,

Bucharest: 2002

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5. Stancu S.,Microeconomie.Comportamentul Agenilor Economic-teorie iaplicaii,EdituraEconomica,Bucharest: 2006;

6. Stancu S., Mihail N.,Macroeconomie. Modele statice i dinamice de comportament.Teorie i

aplicaii,Editura Economica, Bucureti: 2006;7. Stancu S., Mihail N.,Metode i tehnici de conducere, Editura Economica, Bucharest:

2006;

8. Stancu S., Mihail N., Decizii economice n condiii de incertitudine-cu aplicaii pe piaa

financiar, Editura Economic, Bucharest: 2004

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Manager


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Another globalization

Finding the anachronisms and the failures of the present globalization, as well as the

vitiated system of world-wide government, has stimulated the debates regarding the

identification of a more equitable form of globalization to favor the acceleration of the economic

increase and the reduction of poverty.

The deficiency of the present international economic institutions, especially the lack of

transparency and democratic responsibility, claims back with acuteness the reformation of thearchitecture of the international institutional system and the promotion of those economical

policies which must ensure the stability world-wide economy and the amelioration of the

international equity.

Key words: world-wide government, the market failures, market fanaticism,

macro stability, emergent economies, durable development, social and solid

economy.

ion bucur99

Arguments has developed and it has been named as

The intensifying of the globali- world-wide government without a

zation phenomenon and the empha- world-wide government. This system

sizing of the interdependencies claims includes various international treaties

the necessity of a powerful collective regarding the decisional procedures, anaction and of mechanisms adequate for international juridical environment,

taking decisions. some international institutions (F.M.I.,

In the last decades, a decisional and B.M., O.M.C.), which issues essential

international public policy mechanism world-wide economical decisions.

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The globalization represents the state and market. It is obvious that this

ground on which some of the major balance will modify as time goes by and

conflicts of the society are being disputed it will differ from one country to another.

some of the conflicts are based on The problem of reorganizing the

fundamental values, like the role of the present globalization is put face to face

state and of the market. with the debate concerning the role of

The concerns regarding the rea- the market and the development

ppraisal of the theoretical and ideological strategy formulated through the Wa-

foundations of the present globalization shi ngton Congress. Basically, the

and also the functioning mechanisms are regulations of this policy are based on a

based on solid arguments. The theory of the market economy which

economical globalization has outrun the implies a perfect information as well as

political one, and the defiance and perfect risk market, especially for all thefailures of the present globalization is developing economies.

seriously damaging the political and eco- It is obvious that the success of any

nomical stabilization of the world. The economical theory depends on the

problems specific to the world-wide chosen hypothesis and their level of

government and the way in which the concordance with the existent realities.

decisions are adopted on the inter- Since the '80, the researches from

national basis stand in the centre of these the economical science have empha-

failures. sized the market's limits. It has been

As a result, the reforms aim at the shown that uncontrolled markets do not

perspectives of a globalization benefic to lead by themselves to economical

the main majority of the world states, efficiency, and the free circulation of thehence the support for a more equitable capital fluxes on a short term-typical to

globalization. the market fanaticism policy- generates

The globalization enforces new instability and does not ensure the

tasks to the state-nation, but also in a economic increase.

great extent the decreasing of the ability The state has a certain role in

to assume them. The state's limits and maintaining the macro-stability, but the

eff ici ency are condit ioned by its main concern is represented by the

intermediate position among the forces stability of the costs in prejudice of

of the world-wide economy and the production and unemployment.

devolution of the power policy. The economical performances

One of the main, essential options noted by the developing economies have

with whom the societies are confronted led to the loss of trust in the formerly

with contains the role of the state. The planned receipts and to the apparition of

economi ca l success re qui re s th e a new consensus named The Washing-

assurance of a fair balance between the ton post-consensus. The old agreement

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is also blamed for the excessive concen- The new reform policies whose cen-

tration on the increasing of the gross do- tral objective was the minimum reduc-

mestic product in the detriment of other tion of the state's role, favoring the

factors which were conditioning the privatization, liberalizing the exchanges

living standard. and the capital markets, have become a

source of inspiration in defining and

A profound critical analysis of the directing the development strategies in

present state of globalization has been the emergent economies.

realized by the American economist J.E. It results from analyzing their

Stiglitz, Nobel Prize laureate, famous content the almost identical repro-

theoretician and a good connoisseur of duction of the principles of the in force

the realities of the global economy. He economical policy in the economies

puts forward ample debates regarding which are advanced and based on thethe reorganization of the globalization, belief that the laws of the economical

the reform of the economical policy and science are universal.

the reorganization of the international Therefore the creed of the new

financial system, he suggests a equitable consensus excludes the possibility of a

balance between the public sector and the specific analysis for the developing or

private one and the promotion of a policy transitional economies, as well as the

capable of sustaining a well-balanced possible influences carried on by the

ec on om ic de ve lo pm en t an d th e historical conditions, traditions or other

employment of the work resources. His values on the principles and economical

arguments, which were presented in policy instruments. The universality

works with a wide international fame (La pretension of the vision circulated by theGrande Dsillusion, Fayard, 2002; Quand liberalism may be explained by the

le capitalisme perd la tte, Fayard, 2003; oneness of the market economy, by the

Un autre monde. Contre le fanatisme du non-existence of another truth than

march, Fayard, 2006), are substantiated those of the law market, the quality of

on the theory and ideology which are the the market, by the natural state of society

base for the constitution and the and, as a consequence, the non-existence

functioning of the international econo- of an alternative conception of the

mical institutions. In a trenchant way, world.

based on a rigorous and convincing The real ities demonstrate that

analysis, it is admitted the fact that the various countries' experiences are pretty

economical doctrine of the I.M.F., named diverse from the ensuring the freedom

market fanaticism, according to which and the economical and political

the markets spontaneously lead to democracy point of view. On the

economic eff iciency, is profoundly mediate scene, significant debates have

wrong. informed against the unique thinking,

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the author of the proclaiming the which was characterized by a large

almighty neo-liberal paradigm which stability. The experience shows that such

was dominating USA at the end of the last an objective was never achieved,

century. Basically, this represents the instability becoming one of the major

translation in ideological terms with world-wide feature.

universal claim of the interests of an

assembly of economical forces, especially The main policy of the I.M.F. was

those belonging to the international the liberalization of the financial

capital (I.Ramonet, 1997, p.76.). markets, dominated by a powerful anti-

The critical attitude towards the keynesistic vision which reflects the

unique thinking supremacy appeals to ideology according to which the markets

the principle according to which no are functioning perfectly and the state's

ideology is final and no intellectual intervention should be limited.system may absolutely pretend to be the Traditionally, the economical poli-

last stage of a process ( Montbrial, 2003, cy debates of the I.M.F. have been

p.33). concentrated on the inflation and to a

much reduced extent on the salaries,

The more and more powerful unemployment or poverty.

disputing of the neo-liberal ideology, The main problems which emerge

emphasizing the bad consequences from the weaknesses of the international

which are possible as a result of enforcing economical institutions refer to the fact

its precepts, highlights the necessity of a that on the other hand solutions to the

new approach of the globalization, based market's failures on a world-wide level

on the durable development and which are not identified. There are world-widemakes possible the reconciliation of the public assets which must be produced

economical increase with the social and world-wide externalities which

cohesion and the protection of the must be taken into consideration. On the

environment. other hand, the decisional process

The way in which the globalization emphasizes the non-democratic nature

is administrated today is incompatible and the lack of transparency in the

with the principles of the democracy, and activity of these institutions (Touffout,

the critics addressed to the international 2006, p.190).

economical institutions are becoming On an international scale, only the

more and more virulent. Finance Ministers and the national

In the beginning, I.M.F. had had banks governors are involved in the

bigger objectives than helping the adopting of the decisions which aim at

countries in recess. Through promoted the world-wide financial system. Within

policies, it had to contribute to realizing I.M.F. USA is the only country which has

of a system of the world-wide economy veto right.

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The supporters of the necessity of

Renovating the world-wide reformatting the present economical

institutional system government system are also invoking

legitimacy reasons, transparency and

The rapid and profound changes responsibility within the activity of the

which characterize the geopolitical and international economical and financial

institutional environment claim the institutions. It is noticed within this

permanent adjustment of the new context the profound legitimacy crisis of

gover nment systems to the new the international collective activity both

exigencies. on the conceiving and explaining the

A critical analysis of the govern- objectives level, and from the adjust-

ment's functioning in a world with ment methods and the explaining of the

complex interdependencies emphasizes decisions point of view.its nonfunctional character. The study of the international

The existent tension degree and the go ve rn me nt of th e in st it ut io ns

incapacity of the government's way to highlights the lack of and adequate

face the defiances of the globalization, as institutional structure capable of taking

well as some failures registered by over the functions yielded by the

universal solutions represent clear nat ion al sta te s, as well as th e

proofs of the inadequate nature and of institutional maladjustment to the

the crisis the present world-wide evolutions of the economy.

government is going through. The critics addressed to the

The present world-wide econo- institutions which are administrating

mical government's configuration is the the international common activities areresult of the subsequent arrangements of aiming at two categories of aspects: the

the World War II and it is dominated by a absence of a clearly defined mission to be

paradigm centered on the international the object of a large consensus, the

economical institutions and on the absence of political control and of the

sovereignty of the national states. responsibility (Tirole, 2002, p. 291).

The insufficiency of the contem- The objective regarding the

porary economica l government is democratization of the global econo-

generated by numerous factors and mical institutions must be achieved

multiple causes which are manifesting in under the conditions on which upon

the context of the appearance of a new them a reduced control of thenational

fo rm o f ec on om ic al a nd so ci al states is exercised, on the scale of

organization of the expansion of the transferring of some national adjust-

globalized capitalism and of the present ment competences.

international economical order. Under the circumstances o f

transferring the competences to the

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international authorities, the need for

direct democratic representation is

international standards which may

influence the promoted values by

manifested more and more obviously. economical globalization.

The awareness of the numerous The recent discoveries from the

lacks of the present government system internati onal instituti onal system

and of its incapacity of dealing with the do ma in ma y co nt ri bu te to th e

defiances of the globalization takes identification of a more equitable form

urgent measures of strengthening the of globalization, which would allow the

international government community. acceleration of the economical increase

The reformation perspectives of the and the reduction of poverty.

international inst itutions playing a The debate must not stand between

central part in the government of the anti and pro-globalization, but in adding

world-wide economy constitute a major up the international efforts in order tocontroversial matter. create a possible, necessary and

The actors specific to the global- inevitable new world.

ization exercise a considerable influence

upon government together with the new Political and economical alternatives

adjustment resorts on a world-wide

level. New and important forces, as the The anachronisms of the present

nongovernmental organizations, ex- globalization and the vitiated globalpress themselves progressively. Together government system have multiplied and

with the public governing authorities, claimed the acuteness of a reform of the

private associations and authorities liberal rules of globalizat ion. An

appear on a global level. essential problem is the pertinence andTh e ap pe ar an ce of th e ne w the legitimacy of the alternatives needed

authorit ies on a world-wide scale in order to enlighten an effective

contributes both on increasing the counter power, capable of supporting

number and the complexity of the structural reforms.

economical government resorts, and also For the time being it is considered

on enforcing some new features on the premature to speak about a political

adjustment process of the market. global project.

Simultaneously, the power and the Nevertheless, certain options of

influence exercised by the private alternative political projects may be

authorities are increasing, under the identified: a nationalistic pole in

conditions of the appearance of a new whose acceptation the environment

generation of collective actors. In a broad offered by the national state is the only

sense, the private actors are contributing one to afford and guarantee the the

to the elaboration, the legitimation, the expression of the democracy and the

enforcing and the controlling of the social rights. Its spreading area is large,

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including countries from the North and principles who are being experimented

South; a neo-reformist pole, with a and verified on a national scale; the

more active presence in some Northern post-capitalism who is proposing a

countries and whose priority is structural transformation of the

represented by the pleading for a global capitalistic system. In their supporters'

reformat ion of the internat ional opinion, Marxists and left wing

institutions. The supporters of this trend intellectuals of different orientations, the

pronounce themselves global govern- unlegitimization of the domineering

ment and, simultaneously, they are logics of the capital through post

against any extreme forms of neo- capitalism is following the incapacity of

lib era lis m; a r adi cal pol e, an the capitalistic system to face the

internationalist one which is able to minimal exigencies of the economy and

recognize the domineering influence of to ensure financial security to thean international institution. It is against population.

any nati ona lis t-pro te ct ion ist and As a result of the abuses specific to

reformist answers (Aguiton, 2001, p.18). the capitalistic system, new rules of the

Two large orientations are domi- economical game are being proposed:

nating as economical alternatives: the the replacement of the notion of profit

neo-keynesism, whose theoret ical with the one of need; the democratic

model accepts the logic of the market as a control of the economical activity; the

witness of the economy, but with the consumption as a meaning, not as an

condition to adjust the capitalist system objective, and so on. Basically, it is all

and to limit its perverse effects. the about the developing perspectives of the

central idea is constituted by applying on social and solid economy (O. Castel,a world-wide scale, of the keynesist 2002, p.194-195).

BIBLIOGRAPHY

1. Joseph E. Stiglitz, Un autre monde. Contre le fanatisme du march, Fayard, 2006

2. Ignatio Ramonet, The geopolitics of the chaos (Geopolitica haosului), Doina Publishing

House, 1998

3. T. Montbrial, The world's action and system (Aciunea i sistemul lumii), Expert

Publishing House , 2003

4.J.F. Touffout (ed.), L'avance des hiens publics, Edition Albin Michel, 2006

5. J. Tirole, ,,La gouvernance des institutions internationales'', in Gouvernance mondiale,

Conseil d'analyse conomique, La Documentation francaise, 20026. C. Aquiton, Le monde Nous Appartient, Plan, 2001

7.Odile Castel, Le Sud dans la manodialisation. Quelle alternatives?, La Dcouverte, 2002

50 EconomyManager

the study of indicators of the economic growth at the level or romanian economy

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