The Economic Convergence – Empirical Analysis of Balassa-Samuelson Effect in Romania in the Context of Monetary and Macroeconomic Policy Mix

Petre Adrian and Ionita Alina Georgiana

Abstract:

This paper presents certain results related to the Balassa-Samuelson effect  in Romania, and some estimates regarding the impact of this effect on inflation and real exchange rate appreciation. The econometric techniques of cointegration revealed, in 2006 – 2014 period, that the average annual inflation generated by the Balassa-Samuelson effect in Romania was 0.15%, while the real appreciation of the average exchange rate during the same period, caused by this effect , it was 4.05%.