The independence of Central Banks, a reductio ad impossibile

This paper testifies to the fact that the independence of the Central Banks, as stated by its founding fathers, is nothing more than a chimera. We demonstrate that the hypothesis inflation is a purely monetary phenomenon does not support the plea for independence. Moreover, we show that the conservative central banker, the imaginary Principal-Agent contract, the alleged financial autonomy, just like the ban on budgetary financing, are all arguments that lack logic. We equally show that the idea of independence is not convincing because its operational toolbox, as well as the system of rules it relies on, lack well-defined outlines

A REINTERPRETATION OF SUSTAINABILITY UNDER THE SIGN OF CONSPICUOUS CONSUMPTION

Sustainability is usually constructed in terms of environmental preservation or of replicating a certain output level. To challenge the status-quo, we argue that it is a matter of preserving a certain version of social order, which can only be replicated by a trickle-down pattern of conspicuous consumption enforced by the efficiency gains and productivity achievements of the given socio-economic system. We also present a different view on the relation between sustainability and time by conceiving longevity as a measure of the physical changes that the system undergoes rather than the classical acceptation of a period determined by two temporal coordinates. This allows us to propose a classification of time, distinguishing between cyclical and chronological time based on the physical changes required to create the sense of progression, in each of the two cases. We relate our theoretical propositions to anthropological, sociological and historical facts, culminating in a short exposition of the way in which sustainability has been transformed from a matter of survival to one of ever increasing consumption and expanding output

The Role of Investment Funds in Romania

The main aim of this article is to present the influence of investment funds on the economic growth in Romania between 2007 and 2010. Unfortunately some of the main findings of the paper are: insignificant share of investment funds in GDP, low correlation between inflation rate and the net subscriptions of equity funds, low correlation between benchmark interest rate and bond funds. Instead we validated the direct relationship between monetary funds and the benchmark interest rate. Also, the importance of national investment funds does reflect in: the share of net assets of financial investment companies in the market capitalization, in the share of equity traded at the BSE in the UCITS portfolios, and in the strong growth of net assets in recent years.capital market, financial markets, monetary funds, financial system, net assets, banking system, bonds, portfolio assets, benchmark interest rate

Demand – Supply – Taxation in Times of Crisis

The confrontation of the two doctrines, the Keynesianism and the Supply-side economics highlight that the Laffer perspective is the way to achieve solid economic growth on the long way and aims the core of an “exit from crisis” policy. Therefore, this article aims to analyze the hypothesis that a high level of taxation and public spending deters productive behavior and reduces economic growth during recessions. In other words, an easy taxation and low unproductive public spending are desirable for both, the enterprising investor and the consumer. Using the example of Romanian fiscal policy, on one side, we validated within a Vector Error Correction framework that an increase in government revenues harms consumption, investment and the level of employment, in conjunction with a procyclical behavior of fiscal authorities. On the other side, our results showed some positive effects of an increased government expenditures on consumption and employment, which can be explained by the accelerate deterioration of primary balance deficit and the Central Bank’s low interest rate. Moreover, even though the initial positive response of investment to a government spending shock is positive, this is ephemeral and nonsignificant. Our findings highlight that, in order to reach growth on the long-run in times of crisis, the Romanian economy should adopt the fiscal policy and measures suggested by the Supply-side Economics

On the Relationship Between Foreign Direct Investments and Economic Growth. Romania in Times of Crisis

Foreign direct investments might be perceived as the engine of growth and economic development for both developed and developing economies. For of Romania, a country with a closed regime in the past, their role is even more important in promoting prosperity and social wealth. In the context of EU integration, Romania had benefited from a large amount of foreign direct investments coming especially from the major European economies, but such ascending trend with positive implications towards economic and social areas was all at once interrupted by the recent financial crisis. The deep recession in Romania along with numerous internal disequilibria had a negative impact on those who want to invest in this perimeter. In such circumstances the purpose of this paper is to investigate the effects of the crisis on FDI flows and consequently, on Romania’s development potential using a Granger causality analysis. The results highlight that FDI inflows have a prominent benefic influence on economic growth and that Romanian economic climate is not ready to ensure the bidirectional nexus