Endogeneous Growth

financed by UEFISCDI, Human Resources Young Research Teams project TE 298

Project title: MODELLING ENDOGENOUS GROWTH AND THE MACROECONOMIC POLICY MIX IN ROMANIA AND OTHER EMERGENT COUNTRIES FROM CENTRAL AND EASTERN EUROPE

Principal investigator: Dr. Monica Ioana Pop Silaghi

Project duration: August 2010 - July 2013

Project summary

The macroeconomic policies if they are well implemented have a certain role in the macroeconomic stabilization of a country. By assuring a non-inflationary environment, they facilitate the firms' decisions and consumers' ones to invest and to save so as to assure an economic long-lasting economic growth. The recent academic research is oriented more and more upon the role of macroeconomic policies in the determination of the economic growth rates. In the present project, we model the endogenous growth in Romania including variables as research and development, human capital, foreign direct investments, government size, initial conditions for structural reforms such as the liberalization index and conditions for the development of the private sector in Romania, inflation. The key factor in the economic development of a country is given by the education level and for Romania we need such a study that takes into consideration variables that are a good proxy for this indicator. The relationship between the government size and the economic growth is largely debated in the literature and reflects the way in which it exists the law of diminishing returns to scale as long as the government increases. The analysis of the factors of economic growth taking into account the policy mix at which we assist since 1990 represents the important purpose of the present project.