FM - Economics & Finance

Permanent URI for this collectionhttp://localhost:4000/handle/123456789/17

Browse

Browsing FM - Economics & Finance by Author "Pînzaru, Florina"

Filter results by typing the first few letters
Now showing 1 - 2 of 2
  • Thumbnail Image
    Item
    The evaluation of the equilibrium exchange rate based on the purchase power, for Romania’s case
    (University of Craiova, Faculty of Economics and Business Administration, 2014-06) Anghel, Lucian Claudiu; Pînzaru, Florina; Treapăt, Laurențiu Mihai
    The current paper aims to analyse one of the many models of evaluation for the equilibrum rate in an economy. It also briefly presents the main models and methods used in the specialized literature for the evaluation of the equilibrum exchange rate. The utilization of as many methods allows the deciders of monetary and economic policy to accurately ground the moment of one country adhesion to the euro zone. Also, an analysis can be made, whetehr the respective countru is ready and how fast the process of convergence to the Euro zone can devolve. In general, it is recommendable a country not to force de adhesion to the euro zone because the negative effects may occur for a long period of time, leading to a development for the respective economy under its potential.The estimated model in Romania based on data will be afterwards used for estimating the equilibrum rate and for issuing scenarios concerning its future evolution. Usually, the parity at which the national currency should be converted for an unlimited period of time, will also be around the level of the equilibrum rate. From that moment on, after attending the Exchange Rate Mechanism II (ERM II), the respective country’s economy loses an equilibrum buffer – the exchange rate. Starting from that moment, the country’s economy is supposed to be so performant that it absorbs the internal and external negative shocks, only relaying on the fiscal and budget policies. Hence, the particular importance of a correct evaluation for the equilibrum rate by using several models and methods, so that to be as close as possible to the equilibrum level on mid term.
  • Thumbnail Image
    Item
    Fixing the central parity and the evolution of the currency within the exchange rate mechanism II in the countries that joined the Euro Zone
    (Faculty of Management, SNSPA, 2013-06) Anghel, Lucian Claudiu; Pînzaru, Florina; Dinu, Mihaela; Treapăt, Laurențiu Mihai
    The present paper aims to briefly present the models used by the countries that joined the Euro zone after 2000, in fixing the central parity and the evolution of the local currency towards Euro, when participating in Exchange Rate Mechanism II (ERM II). In this respect, the paper intends to synthesize the main theories for determining the equilibrium exchange rate, as well as to present the modality of putting them into practice in the countries that had already become members of the Euro zone. The better we know the other countries’ experience in the respect of the joining process to the Euro zone, the better will Romania be able to prepare itself for adopting the unique European currency. Thus, we will be synthesize the main approaches within the specialized literature and also in the economic policy deciders’ practice concerning the estimation of the equilibrium exchange rate and implicitly, of the central parity. The paper presents the modality of fixing the central parity and the experience of participating in ERM II for a number of member states that joined the Euro zone after 2000: Greece, Slovakia, Slovenia, Malta, Cyprus and Estonia. For these states, we will analyze both the evolution of the currency towards Euro while participating in ERM II. Starting from these concrete examples, we will explain the advantages and the disadvantages in fixing the central parity over/at/under the value of the exchange rate on the market at the moment of joining to ERM II and we will underline the problems that might occur in the case of choosing a central parity that is not compatible with the equilibrium value of the exchange rate.