TheMarketForIdeas

Japan and the European Union, Pushing Forward Free Trade

Georgiana Boboc

After concluding negotiations in December 2017, European and Japanese officials announced the world’s largest free trade agreement (FTA), which would remove almost 99% of the tariffs between the European Union (EU) and Japan. On July 17th, 2018, at the EU-Japan summit in Tokyo, the two parties signed the Economic Partnership Agreement (EPA), bringing it closer to implementation. The EPA has been praised by the EU trade chief Cecilia Malmstrom as “the biggest trade agreement we have ever negotiated for the European Union”. More

The Reference Social Indicator – Between Necessity and Moral Obligation

Gabriela-Mariana Ionescu

The Reference Social Indicator (RSI) comes to our attention after a ten-year period in which its value has not changed. The lack of political stability and, sometimes, the irresponsibility of governing parties creates the risk of deviating the value of RSI, established by political decision, from the economic, social and moral significance with which this indicator is invested.Considering the consequences generated by the possible arbitrary situation in setting the RSI value, it is necessary in the near future to identify a methodological anchor for the dynamic adjustment of the RSI value, avoiding the incidence of the political factor in this matter. It is therefore necessary to identify a relevant macroeconomic indicator for anchoring the Reference Social Indicator (RSI), so that its variation can be done automatically (via the automatic stabilization mechanism) without the conjunctural intervention of the political factor. More

Ruling over Central Banking…doms

The independence of the central banks – mysterious or miraculous entities in the eyes of masses – is practically an inexhaustible topic for scholars-economists and political scientists, as well as for business-persons and policy-makers.Still, the ultimate bill-payer of all institutional settings and governance organizations is the consumer-citizen.For this character this bell (of the debate) tolls.  More

BNR’s Inflation Bias

Bogdan C. Enache

The National Bank of Romania’s (BNR) recent decision to leave its interest rate unchanged, despite inflation surpassing the 4% threshold, has been justified as a prudent decision in the face of international uncertainties with adverse effect on growth and “preemptive” rate cuts in several advance and emergent economies, but it is also a testimony to the Bank’s inflationary bias and even of its shaky real policy independence.  More

Taxation of Wage Earnings for Pension Purposes in Romania, since 1950

Dan Pălăngean

The income tax has increased about four times in Romania since 1950, according to data published by the National Institute of Statistics (INS). The evolution of gross and net earnings shows that we have reached a doubling compared to the period before the political regime change, which occurred in 1989 (see data presented in extenso and centralized by decades in the table below).  More

WaitSafe in the Pandemic: How to Fluently Reconcile Social Distancing with Personal Mobility

The easing of the lockdown ignited with the advent of COVID-19 pandemic is still subject to strict conditions, as communities need to accommodate sanitary safety concerns with solutions for the freedom of movement for individuals, as the latter is a crucial feature for the “health” of the socio-economic fabric. More

Romania’s Public Debt Relative to GDP – Implications

Dan Pălăngean

The public debt officially measured by the Romanian Ministry of Finance based on the European methodology advanced, in July 2020 alone, almost as much as in the whole second quarter, when Romania was caught in the middle of the pandemic-induced crisis shock and the quarterly GDP decreased by 12.3% compared to the previous quarter. The explanation for the relative increase as a public debt share of GDP (2.1 percentage points in Q2 and 2 pp in just one month, July 2020) is not limited to the increase by about 40% of the additional monthly borrowed amounts (RON 13.5 billion compared to the monthly average of 9.7 billion in full pandemic), but also in the reduction of the reporting base by over RON 20 billion (approx. EUR 4.1 billion) as a result of the methodology used.  More

Plus ça change, plus c'est la même chose

Mary Lucia Darst

In his article “Opioids and Paternalism”, Dr. David Brown described the new face of American drug addiction, “the new underclass is stymied by economic obsolescence, a sense of victimhood, and an exaggerated view of its own physical damage”. One of my former professors used to say, “don’t re-invent the wheel unnecessarily” to convey the idea that one does not need to create new analyses and methodologies for every problem. In addition to Dr. Brown’s sound scientific and psychological observations, I believe that we may also look to history for enlightenment regarding the current malaise. More

How the Latest Trump Tariffs Will Affect Romania

Bogdan C. Enache

On March 1st, US President Donald Trump announced that his administration will unilaterally introduce new tariffs on steel and aluminum imports in the United States of America. Officially motivated by national security concerns under the World Trade Organisation (WTO) rules, the announcement follows a similar decision to unilaterally introduce new tariffs on imported solar panels and washing machines, for reasons of unfair competition, taken at the end of January. Along with pressures for a redrawing of the North-American Free Trade Agreement (NAFTA) with Mexico and Canada and the retreat from the Trans-Pacific Partnership (TPP), the decision constitutes the most palpable expression to date of the United States’ new protectionist trade policy, to which Donald Trump alluded to since he was campaigning on an “America first” platform for the White House back in 2016. But unlike the solar panels and washing machines tariffs of a month and a half ago, which targeted primarily Chinese, South Korean and other Asian economies, the new steel and aluminum tariffs risk triggering a full-scale trade war with the European Union’s – still – 28 nations trade bloc, Romania included.  More

How to Use Ancient War Strategies in Modern Business

Karla Dana

“Marketplace is a battlefield” – a commonly used Chinese proverb, applicable today more than ever. As cross-cultural business consultants, we believe in strategy and clarity above all else, and who else to learn from if not Sun Tzu himself – the Chinese military tactician influencing strategic decision-making today despite having lived long before the formation of the PRC or the emergence of capitalism. Yet he claimed that the best battles are won without drawing swords. More

Commercial Reflections for a Centennial Romania: Trading Abroad Adds to the Prosperity of a Nation, Albeit National Prosperity Shall Never Be Tradable

Dumitru Miron

In the history of a nation, its commercial relations with neighbouring countries or with those over the seas matter a great deal. Someone once said that, across centuries, the most common ways of interrelating between people were war and trade. Both activities have many advantages but also significant costs. History has shown that in the case of trade, the balance is tilted towards its benefits. Although they also participated in armed conflicts, most often against their will, the Romanians contributed to the history of Europe and the world especially by participating in cross-border trade. Who were their ancestors and what did they do? Who are their contemporaries, and most importantly what must they do? The answers to these questions rest on today’s youth, who are obliged to flesh them out and to better understand their past in order to become the main actors to bring about a positive change in the Romanian society. It is the authors’ hope that the work presented in article is going to contribute to the process of dealing with the various facets of the historical development of this nation, which has done well in the past and should take great pride in itself.  More