ANALYZING THE SAVING AND TWIN DEFICITS CORRELATION: EVIDENCE FROM ROMANIA

• Format: Article
• Language: deu
• Published: University of Oradea 2015-07-01
• Series: Annals of the University of Oradea: Economic Science
• Online Access: http://anale.steconomiceuoradea.ro/volume/2015/n1/044.pdf

The importance of saving, specifically in the particular case of Romania, is relieved by the fact that supplies the necessary financial resources for a “healthy” economic recovery and growth. Accordingly, saving finance the investment from domestic sources and do not expose the national economy to the risks and disturbances which come when the economy is financed mainly with resources from financial foreign markets. The last financial crisis, which in many south European countries still an ongoing one, demonstrated again how “toxic” can be the economic dependence of the foreign capital inflows, the positive influence of the national saving being more than relevant in this case. The purpose of this article is to determine if there is a connection between saving and so called twin deficits, public deficit and current account deficit, as main macroeconomic indicators, in the economy of Romania during the 2003 – 2013 years. Particular attention is also given to the national investment situation and to the household saving behavior before and after the financial crises has started. The research methods is based on a qualitative approach and includes mainly methods of observation, value comparison and critical analyze of theories and data collected. First part of the research comprises a qualitative analyze of the theoretical relation and implications of the variables analyzed, so that in the second part to have an empirical data research which includes tables and figures with the evolution of these three economic indicators in Romania. The conclusions of this article lead to a correlation which is conditioned by the economic cycles and its influences over the economy. The findings of this research work would help economic policy makers to improve their macroeconomic decisions.