Optimizing the use of interest rate as a monetary policy indicator

The interest rate is a pro-cyclical macroeconomic variable of great importance given that its level and dynamics generates multiple effects on major components of the economy, including: credit, savings, investment, private and government consumption, gross domestic product, the exchange rate, export and import of goods and services inflation.

The developments of the interbank interest rates practiced by banks influence the savings and loans of non-bank customers. In turn, the savings and loans influence the production, consumption, investment, or, in other words, the economic development of a country.

In our opinion, Romania's integration into the Euro Zone will generate the following effects in Romania: the loss of independent interest rate policy of the NBR and giving up the leu; the elimination of the transaction costs related to the leu / euro exchange rate and the risk of exchange rate between Romania and the Euro Zone; the decline of the interest rates in Romania; the increase of investments because of the low cost of capital; the improving of the credibility of macroeconomic policy and, consequently, lower country risk; Romanian local financial market integration in the European financial market; the increasing of the prices transparency and the competition in the goods and services market.

To absorb any asymmetric shocks present in the Romanian economy after its integration into the Euro Zone it can use the labor market and the fiscal policy as an alternative mechanism.
 
We believe that, by structuring and analysis made, by tracking of obtaining results as objective as possible based on detailed analysis of the issues addressed, by using econometric and data analysis techniques and by combining the econometric results with  economic judgment, this book can be in economic research, a solid point of departure and / or deepening the analysis of interest rate as an indicator of monetary policy.

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