Mugur Isrescu: Opening remarks - the International 2023 ERMAS
conference
Welcome address by Mr Mugur Isrescu, Governor of the National Bank of Romania, at
the ninth edition of the Annual Scientific Conference of the Romanian Academic
Economists from Abroad, the 2023 ERMAS Conference, organised in partnership with
the Bucharest University of Economic Studies, Babe - Bolyai University Cluj-Napoca
and ERMAS Association, Bucharest, 26 July 2023.
* * *
Distinguished audience,
Ladies and gentlemen,
It is my pleasure to wish you the warmest welcome at the National Bank of Romania,
for the ninth edition of the Annual Scientific Conference of the Romanian Academic
Economists from Abroad - the ERMAS conference.
On behalf of the Board of the National Bank of Romania, I wish to congratulate the
scientific committee for their professionalism and the remarkable program they have put
together. Allow me to extend our greetings to all our partners and their contribution to
organizing this top event in academia.
I recall with great pleasure the first edition of the ERMAS conference back in 2014
when I had the honor to be a keynote speaker. I remember the excellent quality of the
ideas and of the papers presented. We meet again today for the ninth edition, jointly
organized by the National Bank of Romania and the Bucharest University of Economic
Studies.
Over the last ten years, the ERMAS conference has become the flagship of the
economics academic conferences in Romania with the constant support of the
BabeBolyai University and, starting 2019, of the ERMAS Association. Universities from Iai,
Sibiu, Timioara and for the current edition, the Bucharest University of Economic
Studies have also been supporting this initiative; and of course, your constant and
impressive support as contributors to each edition of the conference with high quality
research papers. I do believe that our partnership with the academia is based on a
longstanding tradition, as a pillar for progress and public policy development in Romania.
Back in 2014, I encouraged you to dedicate some of your research to specific problems
of the Romanian economy and society, to participate in public debates on relevant
economic topics, to collaborate with the local academic environment, as well as with the
institutions in charge of implementing economic policies. Many of you did so. The
activity of the ERMAS association, the common projects some of you have developed
in close collaboration with my colleagues from the National Bank of Romania, as well as
your partnership with domestic universities are excellent examples and I encourage you
to continue.
Ladies and gentlemen,
Having been trained and having worked in the field of economics for more than 50
years, I am fully aware of the relevance of research for public policy decision making.
We, at the National Bank of Romania, have been trying to stimulate quality research as
a credible source of economic policy advice. We have encouraged participation to other
events of at least similar scope, in which the NBR experts would present the results of
their research, focused mainly on problems specific to the Romanian economy. The
interaction with and the validation of the results by the academic community, including
you, the academic diaspora, represent important steps in validating the research. Thus,
our partnership with the ERMAS association and Babe-Bolyai University in organizing
the future editions of this conference come as a natural step towards reaching the
above-mentioned objectives.
Implementing monetary policy in emerging economies has always been a challenging
task. As experience has taught us, for a small open economy - with a fully liberalized
capital account and frequently unpredictable capital flows - multiple monetary policy
instruments are needed most of the time.
Even more so now, in an environment prone to ample shocks and increased volatility
related to the pandemic and the current war in neighboring Ukraine. I am glad to see
that some of the papers included in the program of the conference address this issue of
multiple instruments, such as the exchange rate. Macroprudential policies are also
helpful for maintaining financial stability and these issues are also addressed.
The current economic context, marked by overlapping crises, represents quite a
challenge to the policy makers. For central banks across the world, bringing down the
relatively high and persistent inflation is such a test. Many of the papers that are going
to be presented analyze the determinants of inflation such as energy prices, global
supply chain pressures, labor market or fiscal policy and its interaction with monetary
policy.
Ladies and gentlemen,
In 2000, when Romania started the negotiation process to join the European Union, its
GDP per capita in terms of purchasing power standards represented only twenty six
percent of the EU per capita average, the lowest among EU and candidate countries. In
2007, when Romania joined EU, its GDP per capita represented forty-four percent of
the EU7 per capita average (in terms of purchasing power standards). The same ratio
now is seventy-seven percent (76.9 percent), above Greece (68 percent), similar with
that of Portugal (77.3 percent) or Hungary (77.4 percent) and slightly below Poland
(79.6 percent).
However, growth in Romania was not evenly distributed. Bucharest is currently above
one hundred sixty, while much slower converge took place for other regions.
I cannot emphasize strongly enough that continuing and improving the absorption of EU
funds is the best way to boost the potential growth of our economy. An additional factor
proven to boost the economy is the human capital.
Understanding the sources of economic growth and the role of education, topics that
many papers will cover during this conference, is of paramount importance.
Distinguished audience,
Last but not least, during your social program, in the Carpathian Mountains - Sinaia and
at Bran Castle - you will discover or re-discover some parts of Romania, a country with
a rich history.
Allow me to add a few fun facts about Sinaia, which is an eponym of Mount Sinai. By
the end of the 17th century, a group of monks, led by Mihail Cantacuzino, a landlord of
those times, went on a pilgrimage to Palestine and the Sinai Peninsula, to Saint
Ekaterina Monastery. Once returned, they established a monastery in the poorly
inhabited, but abundantly beautiful area, called Sinaia Monastery. A century later, the
first King of Romania, Carol I fell in love with the place and built Pele Castle, his
summer residence, which you will visit. Little by little, Sinaia became popular among the
members of the high society: they started building summer residences as well as
hotels, villas. One can still admire there original buildings of the 19th and early 20th
centuries. I hope you will have an enjoyable trip in the Carpathians.
To conclude, I am confident that the conference will be a successful event. I wish you
all fruitful debates and a pleasant stay in Romania!
Thank you!