Analysis of Purchasing Power Parities in Romania in the context of EU integration

• Main Author: Roxana Cristina Vîlcu
• Format: Article
• Language: English
• Published: Editura ASE Bucuresti 2015-03-01
• Series: Romanian Economic Journal
• Subjects: Purchasing Power Parity; inflation rate; GDP; Harmonised Indices of Consumer Prices
• Online Access: http://www.rejournal.eu/article/analysis-purchasing-power-parities-romania-context-eu-integration

Purchasing power parity (PPP) is a useful tool for international comparison of prices between countries, in order to analyze the degree of economic development. On this line, purchasing power parities are indicators that express the main macroeconomic aggregates, in a common currency for all the countries subject to international comparisons. This material analyzes the evolution of PPP in Romania for a time interval of 10 years (2004-2013). The purpose of research is to analyze the purchasing power at national level, in the context of integration in European Union (EU). The period before and after Romania’s integration in the EU, has an important role to establish the positioning of our country in terms of purchasing power, compared to the other EU countries. The main conclusion of the paper is that Romania is the country with one of the lowest purchasing power parities compared to other EU countries, along with Bulgaria, which joined the EU in the same year (2007). Given that PPP cannot establish a hierarchy of countries, the research takes into account other important indicators such as: Harmonised Indices of Consumer Prices, GDP and inflation rate.