The Relationship between Monetary Policy and Foreign Direct Investment in Romania

Abstract :

The present study tries to highlight the possible influence of the monetary policy decisions on the flows of foreign direct investment in Romania through an econometric analysis. Advantages of FDA in the economy are many, namely financial stability, increasing productivity of physical capital and increasing employment of labor force but one can say that economic literature studied less the impact of monetary policy measures on FDI, The methodology used involved a database on: the flow of direct investment, money supply, exchange rate, monetary policy interest rate, inflation and GDP. Calculations confirm that selected variables can be successfully used in the calibration of monetary policy decisions with the purpose to attract foreign investment in our country.