VEC MODEL OF DEVELOPING COUNTRY INFLATIONARY DYNAMICS a€“ AN EMPIRICAL STUDY a€“ THE CASE OF ROMANIA

One of the most difficult issues confronting that monetary authorities in many developing economies have to deal with is the management of a stable price environment. Inflation can create uncertainty, a low level of investment, and raise costs in generalinflation forecasting, monetary policy, developing countries, Romania, VAR model

THE VOLATILITY OF THE FINANCIAL MARKET – A QUANTITATIVE APPROACH

During the last years, the financial markets have been subject to significant fluctuations of their financial actives. These spectacular movements have revived the interest, in the academic circles and policy makers and regulation and control authorities as well, for the financial market volatility. The analysis of these phenomena is justified by the fact that the stock exchange chocks have significant effects on the financial stability and they can lead to serious consequences in the real economy

GRANGER CAUSALITY AND COINTEGRATION IN ROMANIA’S INFLATIONARY DYNAMICS – AN EMPIRICAL STUDY

One of the most difficult issues that monetary authorities in many developing economies have to deal with is the management of a stable price environment. Inflation can create uncertainty, a low level of investment, and raise costs in general, thus lowering rates of growth. As a result, there exists a widespread need for understanding inflationary dynamics in any country of interest, especially in developing countries, subject to more significant and volatile price changes. This paper develops a VEC model for the Romanian economy, using CPI index and other macroeconomic data, in order to capture the transmission mechanism of inflation.inflation forecasting, monetary policy, developing countries, Romania, VAR model

AN INVESTIGATION OF LONGRUN RELATIONSHIP BETWEEN ECONOMIC GROWTH, INVESTMENT AND EXPORT IN ROMANIA

The objective of this study was to estimate the long-run relationship between economic growth, investment and export in Romania using trimestrial data from the National Bank of Romania as well as National Statistical Institute. The econometric methodology employed was the Cointegration and Granger Causality test. First, the stationarity properties of the data and the order of integration of the data were tested using the Augmented Dickey-Fuller (ADF) test. We found that the variables were non-stationary in levels, but stationary in first differences; that is, they are integrated of order one (I (1)). Since we used single equation model(s), the application of Johansen multivariate approach to cointegration was necessary to test for the long-run relationship among the variables. The result showed the existence of a single cointegration equation between the variables. The result of the Granger causality test shows a bidirectional relationship between investment and economic growth and also a bidirectional relationship between investment and exports but the result of the causation between export and growth was statistically insignificant.economic growth, investment, export, Romania, VECM model

ACCOUNTANTS ABOUT ACCOUNTING POLICIES. AN EMIPRICAL INVESTIGATION OF SMES FROM BIHOR COUNTY

This paper examines the setting up of accounting procedures and policies in sampled SMEs from Bihor, county selected after criteria of size at the end of 2008. In order to conduct our research we have set up a questionnaire of 25 questions which has been applied to 100 SMEs. The obtained results showed that out of the 83 respondents, only 92,68% agree with the provisions of Article 10 of Order 3055/2009, according to which entities must develop their own accounting policies approved by the managers, only 75,60% of the respondents agree that the existence of written accounting policies at the enterprise level improves the quality of financial reporting and managers’ decision making process and a significant number of respondents (21,95%) do not know the fact that during a financial year, a firm’s accounting policies cannot be changed. The most relevant result of our investigative research consist in identifying the need to train the human resources involved in the process of writing and applying accounting policies and procedures in SMEs and the necessity to set up a manual of accounting department.accounting policies, financial reporting, disclosure, SMEs

AN INVESTIGATIVE STUDY REGARDING SMES SPECIFIC ACCOUNTING POLICIES

In this paper we intend to continue the research regarding the enterprise accounting policies and the manner in which these are perceived by the practitioner accountants, preparers of financial statements. This time, in order to carry out the research, we made up a new questionnaire applied to the same sample, containing a number of 100 SMEs in Bihor County, selected according to the criterion of the average number of employees and that of the level of net turnover at the end of 2008. Continuing previous conducted research we have investigated this time the specific accounting policies of the sampled SMEs from Bihor County and the way these policies are understood by practitioners and implemented in order to prepare financial statements. Surprisingly, we have found that only 93.33% of the respondents agree that the elements presented in the annual financial statements of the entity are evaluated in accordance with the general accounting principles stipulated in Order 3055/2009, according to the accrual accounting. Half of the people interviewed had in view all four qualities of accounting information (intelligibility, relevance, credibility, comparability) in drawing up the annual financial statements, and most of them (56.67%) are not aware of the possibility to use a significance threshold (10%-15%) of the total value of that particular category of assets, liabilities, expenditure, income and results for an as faithful as possible presentation of information in the balance sheet and in the profit and loss account.accounting policies, financial reporting, disclosure, SMEs

THE RELEVANCE OF PSYCHOLOGY THEORIES TO FINANCIAL ACCOUNTING

Starting from the interest that we have found in psychology sciences in order to understand better the way managers, analysts and last but not least investors behave in the decision making process our study focuses on the link between financial reporting, disclosure policies and investors judgment under uncertainty. The theoretical background describes the rational judgment of investors found in economic utility theories but also looks upon the main cognitive and social psychology for irrational behavior in the decision making process. Our research mainly focuses on measuring the influence of five psychological factors on the irrational behavior of potential investor. We showed that overconfidence occurs when investors overestimate the precision of their private signals and their knowledge about the value of a financial transaction and always remember the successfully times and easily forget the failures. Also, we have pointed out that limited attention is frequently associated with changing in disclosure policies and selfcontrol is negatively related to irrational behavior of investor.psychology theories, financial reporting, disclosure, investor, judgment, decision making process, psychology variables

TESTING BETA CONVERGENCE ACROSS EU28 AND EU15 COUNTRIES

In the attempt to answer the question whether the poorer economies will catch up the economies of the richerones over time, more and more studies on the convergence found that measuring any imbalance between countries exhibita great interest. Whereas at present there is a great diversity of research and approaches to convergence and a huge variety of calculation methodologies, in this paper we present one of the concepts that asserted itself in the process of real convergence namely the beta convergence (β). Although this concept has been contested by some economists like Friedman (1992) and Quah (1993) who state that the regression model of economic growth used can give awrong indication of the presence and expansion of beta convergence, the concept of beta convergence was asserted in the economic literature. It has become an indispensable instrumentfor the measurement, the econometric analysis and description of this process, when considered either in its incipient simple form (absolute beta convergence) or in its developed form (beta conditional convergence).Thus, to identify a possible convergence process or rather a trend of divergenceamong European economies, we have investigated the relationship between the average annual growth rate of the GDP per capita for the period of time T and the initial level of the GDP per capita in the year t0, employing the methodology proposed by Barro and Sala-i-Martin namely estimating an equation for economic growth. To estimate this equation for the UE 28 and UE 15 countries we haveusedannual statistical data for 2000 – 2014 collected from Eurostat.Results revealed a strong correlation between the variables for the EU 28 countries, while for the EU-15 countriesthe estimations revealed a weak one.As a conclusion, the new member states of the European Union have enjoyed a high rate of real convergence compared to older member states. This confirms the theory that the poorer economies have certain advantages in terms of economic growth compared to richer ones, allowing them to grow faster and recover such disparities between them

ACCOUNTING MANIPULATION: AN EMPIRICAL STUDY REGARDING MANAGERS’ BEHAVIOR

The study analyses managers’ behaviour from Romania when dealing with creative accounting. For this we realized an empirical study within the Arad county space, having as main objective the identification of the managers’ perception regarding the usefulness of accounting information and of other factors considered when making decisions. Another aspect was to interpret the managers’ tendency towards manipulation or strategic management of results. The empirical research was carried out between December 2013 and January 2014, and the research method used was the survey, and as an instrument of the research we used the questionnaire. The questionnaires were posted on a website but some of them were applied directly in the field to ensure a response rate of at least 30%. For the analysis and confirmation of the feasibility of the questionnaire and of the measurement scale, we used Cronbach Alpha method. The results obtained after statistically processing the answers received from respondents and after testing the research hypotheses show that there is an increased interest of the managers from the investigated Arad firms to improve the quality of the financial accounting information and to give the users as beautiful an image as possible of the company’s performances; it is noticed their inclination to the manipulation of the accounting figures. On the other hand the results obtained demonstrate that, despite the fact that most of the managers from the sample consider that using ethics is a priority in making decisions, this idea is not an obstacle for more than a half to change an accounting policy that would affect the true image but would be favorable to the image of the company The utility of such research contributes to the insurance of the premises for the development of future research, looking to test the reaction of the professional accountants in our country, regarding the phenomenon of creative accounting