MONETARY CONDITIONS INDEX: THE MONETARY POLICY INDICATOR IN ROMANIA

On its way to the accession to the European Union, Romanian could decide upon adopting the strategy of direct targeting the inflation, abandoning thus the intermediary targets after 2003. Therefore, the estimation of the monetary condition index would have only informative value since it is an intermediary target - monetary base. The information could be useful as a way of understanding the feature of the monetary policy (hard or soft constraints) and of the impacts the monetary policy has on the economy. The paper estimates the monetary conditions index for Romania using various bases of computation. Having in view the index estimation, the degree of openness of the Romanian economy is estimated to fall within the interval 24.7 and 32.9 as compared to 33 for Canada and 50 for New Zeeland.