The book entitled The Capital in post-communist Romania (Florin Georgescu, Romanian Publishing House) is now available online
Romania belongs to Europe not only in geographical terms, but also thanks to its one-of-a-kind cultural features. Standing at the confluence of the East and the West, being the sole Christian Orthodox nation among the Latin peoples, the sole Latin-rooted speaking people in the Orthodox East and a cultural “melting pot” in itself, Romania boasts a culture that carries a valuable historical legacy. The National Bank of Romania is definitely a part of this legacy and was one of the key drivers of modern Romania.
A significant economic recovery in the euro area (EA) has been underway in recent years. Nevertheless, major challenges still remain as the Banking Union (BU) is incomplete and the EA is not yet robust enough when it comes to its tools and policy arrangements.
The global financial crisis has pushed central banks to broaden and heavily exploit their monetary toolkits as well as to find new instruments for the more delicate financial stability domain. One weapon in the arsenal, forward guidance, had be put to good use on the monetary policy field as central bankers strived to tame markets, buy time for reforms and persuade the public of the existence of a light at the end of the tunnel.
Monetary policy, in the future, will probably be a mix of monetary aggregates control (via the use of macro-prudential measures – which are a euphemism for capital movement control) and more pragmatic inflation targeting…
20 December 2016 marked the 165th anniversary of Johan Gustav Knut Wicksell’s birth. One of the world’s most prominent economists. But, in all probability, the most underrated one as well, as some argue, myself included. His work is important for understanding both inflation and monetary issues and public finance-related matters. There are, however, two enormous contributions that Wicksell has made to the economic research method and that, to my knowledge, no one has highlighted so far.
During hearings in the US Congress the Commerce Secretary in the new Republican administration asserted that the United States wish ‘fair trade’. Such a statement indicates a radical change of vision regarding foreign trade relations if compared with the thinking that prevailed after 1945
Steve Jobs brought us the Vibe and is keeping us connected even after he joined the angels. How did he charm us? By making our hearts sing! So did Nelson Mandela, whose art of touching hearts, rather than minds still resonates.
Emotion versus reason – are they both sides of a coin? How can one reach someone else’s heart with rational words, when emotion prevails? A vibe of words touching our hearts…
It is broadly accepted that the success of monetary policy comes from the CBs ability to manage effectively market expectations. But without being credible, a central bank cannot properly manage expectations. Mario Draghi, the ECB president, reiterated in April 2016 how important is for a CB to be credible: “any time the credibility of a central bank is perceived as being put into question, the result is a delay in the achievement of its objectives, and therefore the need of more policy expansion.” In other words, in order to achieve effectively its monetary policy objectives, a CB must be fully credible.
The financial cycle has ended up in a very deep financial crisis. Very low interest rates, ultra-low, even negative, policy rates epitomize this crisis; they have raised concerns about the global economy and have triggered heated debates among economists, decision-makers. Central banks, especially those which set the tone in financial markets are under scrutiny taking the center-stage of debates. Top ECB officials cite structural conditions in the European and the world economy as an explanation for the very low interest rates. In essence, these conditions refer to the balance between investment and saving[1]. The IMF also got involved in the debate by saying that ultra-low rates (even negative) are not unjustified in the current context[2]. The BIS, instead, warns repeatedly about side-effects of non-standard measures.
