Authors of the study (March 2008):
-Daniel Daianu,MEP
-Laurian Lungu,Cardiff Business School

This study was presented in Brussels on the 27th of February 2008, during a workshop organized by the Liberal and Democrat group in the European Parliament in order to analyze the causes of the current international financial instability and possible courses of action (for more information about this seminar, see the heading events-seminars).

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Abstract. A combination of cyclical and structural factors has lead to a situation which could threaten financial stability worldwide. As the current financial turmoil is unfolding it becomes clearer that the effects of the initial sub-prime crisis, which originated in the US, are spreading across other asset markets worldwide, increasing the likelihood of a global credit crunch and an economic downturn. In the light of these developments there is a need for the implementation of strategies for action.

This paper focuses on structural causes of the current crisis and on policy issues such as enhancing transparency, resolving conflicts of interest, incentives structures in the financial industry and, not least, improving the existing regulatory and supervisory frameworks.

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Authors: Daniel Daianu (coordinator),Catalin Pauna,Alina-Stefania Ujupan, Liviu Voinea

On the 18th of March 2008 Daniel Daianu launched at the European Commission in Brussels a study on the review of the European Union budget. The study, carried out by a team of Romanian economists led by Daniel Daianu and called "Managing diversity for a growing Europe: a Romanian analysis on the budgetary review process" responded to the consultation paper "Reforming the Budget, Changing Europe", launched by the European Commission in September 2007.

At this seminar took part, among others, the Commissioner Orban and Prof. Andre Sapir of the Free University of Brussels.

"Managing Diversity For Growing Europe: a Romanian view on the EU budgetary review process" is the first Romanian study on the budgetary review process and can be accessed on the EU Commission's website (see the link below).

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Authors: Daniel Daianu and Ella Kallai
The study was published in the Romanian Journal of Economic Forecasting

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Abstract

With a view of enhancing disinflation inflation targeting (IT) was introduced in Romania in mid-2005. Contradictory pressures have challenged ever since the functioning of this monetary policy regime owing to peculiar features and objectives of the Romanian economy. First, the requirements imposed by the achievement of nominal and real convergence in order to join the European Union, and, eventually, the European Monetary Union, ask for sustainable high economic growth and the consolidation of disinflation simultaneously, which is an extremely ambitious task. Second, the economics of inflation targeting tells that the “divine coincidence” of inflation stabilization and real stabilization objectives can be achieved in specific economic circumstances, which might be pretty hard to fulfill in the Romanian economy. Third, the operational requirements of the implementation of a strict inflation targeting regime are unlikely to be met under the current monetary transmission mechanisms; this paper argues that a soft version of inflation-targeting is feasible under the circumstances. Fourth, the integration into global financial market (and a premature opening of the capital account) increases the sensitivity of the economy to external shocks and diminishes the efficiency of an independent monetary policy.

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