This paper evaluates the trade-off between output volatility and the variability of the inflation rate around its target (Romanian case). The optimal choice for National Bank of Romania (NBR), in our opinion, is the flexible inflation targeting. For this purpose, NBR must explain the loss...

The loss of the sovereign interest rate and exchange rate instruments is the main potential cost of joining a monetary union since it becomes more difficult to adjust swiftly to shocks. In the case of demand shocks that affect all countries more or less equally (symmetric shocks), the loss of...