A Multiple Regression Model of Inflation Rate in Romania in the Enlarged EU

The main goal of Romanian monetary authorities after accession to the European Union is to maintain the inflation rate in the proposed target. In that respect, the process of slowing inflation can be maintained through considerably reduced raises in administered and volatile prices and minimizing the inflationary impact of the newly introduced indirect tax on alcohol and tobacco products. The persistence of inflationary risk associated with the current macroeconomic framework, largely as a result of the increasing of some indirect taxes and of fast expansion in domestic demand, prompted the monetary authorities to continue the gradually tighten policy. This context makes necessary the elaboration of a model that studies the trend of inflationary process due to most significant influence factors. A very important factorial variable is the average interest rate on credit institutions with direct implications in the evolution of the domestic demand. Other variables that have influence are the net income and the unemployment rate. All these conditions are considered in the process of elaboration of the multiple regression models for Romania in the enlarged European Union