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Corresponding Author:
Yu Hsing, Department of Management & Business Administration, College of Business, Southeastern Louisiana University, Hammond, LA, USA

Is Real Depreciation or more Government Debt Contractionary? The Case of Romania

Volume 70 - Issue 4, October 2017
(pp. 469-478)
JEL classification: F31, E62
Keywords: Exchange Rates, Government Debt, Interest Rates, Oil Prices, Wages

Abstract

Applying the aggregate demand and aggregate supply model, this paper finds that Romania’s real GDP is positively associated with real appreciation of the leu during 2005.Q2 – 2013.Q4, the real oil price and real wages and negatively influenced by real appreciation of the leu during 2014.Q1 – 2016.Q3, government debt as a percent of GDP, the real interest rate and the expected inflation rate. These results suggest that recent real depreciation of the leu would help raise real GDP, whereas recent rising government debt as a percent of GDP would be harmful to real GDP.


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Institute for International Economics
of the Genoa Chamber of Commerce


Istituto di Economia Internazionale
Camera di Commercio di Genova
Via Garibaldi, 4 (III piano) - 16124 Genova (Italy)
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