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Competitiveness, Economic Freedom and Real Exchange Rate. Evidence from Romania

By Mihaela Herciu and Ramona Toma

Abstract

In the new context of European Integration, Romania has to improve some important macroeconomic indicators, such as: competitiveness, economic freedom and real exchange rate for a sustainable economic growth. Many authors emphasize that competitiveness and economic freedom affects economic growth through stimulating investment and business environment. The equilibrium exchange rate is crucial as it directly influences external competitiveness, especially through export prices. For Romania, the competitiveness can be improved through the economic freedom growth and the real exchange rate appreciation. But this appreciation must be accompanied by a rise in productivity and in the quality of the products offered on the external markets in order not to affect Romania’s external competitiveness.

Topics: M21 - Business Economics, O11 - Macroeconomic Analyses of Economic Development, F31 - Foreign Exchange
Year: 2006
OAI identifier: oai:mpra.ub.uni-muenchen.de:1722

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