INTEREST RATE, EXCHANGE RATE AND INFLATION IN ROMANIA. CORRELATES AND INTERCONNECTION
INTEREST RATE, EXCHANGE RATE AND INFLATION IN ROMANIA. CORRELATES AND INTERCONNECTION

Summary/Abstract: The connection between the interest rate, the exchange rate and inflation is important due to their impact and volatility on the economical balance. This article aims to establish the relation between these factors, first on a theoretical level, followed by an econometric one, taking Romania as being the subject. By applying the regression method, the study aims to establish an interdependence relation between inflation, exchange value and interest rate, and conclude by answering which of these has a more powerful impact on modifying the others by testing several hypotheses.

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