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Публикация

Andrei Sterescu

1/ Happy to announce that my paper looking at the evolution of Romania’s growth model and macroeconomic policy regime over the past 15 years, using an import-adjusted GDP decomposition approach, has been published on the Commission’s website. Long 🧵.

EU Economy and Finance

🔎 What has been driving Romania’s growth since 2010? In our newest publication, we explore the role of imports, exports & demand - as well as the challenges lying ahead. 🔗 Read more: link.europa.eu/y76NDC

Обсуждение

1 прямых ответов · 10 сообщений

Andrei Sterescu

2/ Romania recorded solid output growth on average for the better part of a decade and a half, yet persistent and, since 2019, large twin deficits led to mounting fiscal and external vulnerabilities, as well as lower GDP growth.

Ответ для Andrei Sterescu
Andrei Sterescu

3/ This combination of an increasingly expansionary policy mix and weaker growth is puzzling at first sight, as sustained demand stimulus would normally be expected to lift activity.

Ответ для Andrei Sterescu
Andrei Sterescu

4/ To analyse these developments, the paper first adopts an accounting framework that disaggregates the domestic and foreign content of final demand and reallocates imports to final uses according to their direct and indirect import content.

Ответ для Andrei Sterescu
Andrei Sterescu

5/ Real GDP growth is then decomposed into household consumption, government consumption, gross capital formation, and exports once the imported component of each expenditure category has been netted out.

Ответ для Andrei Sterescu
Andrei Sterescu

6/ It then relates these empirical patterns to a stylised set of macroeconomic policy indicators in order to interpret how the evolving policy mix has coincided with Romania’s growth performance and external imbalances.

Ответ для Andrei Sterescu
Andrei Sterescu

7/ The paper then distinguishes three periods: 2010–2015, a post-GFC adjustment phase; 2016–2019, characterised by discretionary fiscal loosening and strong income growth; and 2020–2024, covering the COVID-19 shock, the energy price shock and the subsequent recovery phase.

Ответ для Andrei Sterescu
Andrei Sterescu

8/ As a starting point, useful to look at the evolution of final demand. Household consumption moved above its pre-COVID trajectory, while investment rose well above trend before levelling off after 2022. Exports recovered after the COVID-19 shock, but then diverged from trend.

Ответ для Andrei Sterescu
Andrei Sterescu

9/ Reallocating imports from aggregate net exports back to the components that generate them changes the attribution of growth across expenditure categories. Exports emerge as a larger and more persistent contributor to growth.

Ответ для Andrei Sterescu
Andrei Sterescu

10/ The adjustment reduces the growth contribution of all domestic components. Because gross capital formation has a high import intensity, its contribution to real GDP growth is significantly smaller once the imported content is netted out.

Ответ для Andrei Sterescu
Andrei Sterescu

11/ From the mid-2010s, the trade balance deteriorated as domestic absorption strengthened and the import content of domestic demand increased relative to GDP. Since the pandemic, it has been associated increasingly with weaker exports relative to GDP as well.