The Transmission Mechanism of Monetary Policy in Romania

Abstract

Abstract:- As concerns the process to traverse the macroeconomics analysis reasoning of the budgetary earnings and expenses, there shall be crossed the phases whose target consists in defining and understanding the „the balanced production ” term. The issue of the consequences generated by the increase of the real quantity of money on the interest rate from the transmission mechanism point of view is by means of the monetary policy management mechanism that the National Bank shall control the money stock as an independent variable, and, consequently, shall also control the interest rate and the available income as associate variables. The multiplier modelling process can make it possible to render evident a possible interaction between the central bank and the other banks as concerns the money offer. This interaction implies an adjustment mechanism that consists in re-defining the monetary base, in re-formulating the multiplier, and in studying the money – credit relationship. Key-Words:- macroeconomics modeling, cybernetic systems, money supply, multiplier process, interest rate, monetary base 1. The main characteristics of the monetary policies The Romanian banking system has experienced a continuous development from the point of view of