Revisiting crisis generators in Romania and other new EU member states

Liviu Voinea

Review of International Political Economy, 2013, vol. 20, issue 4, 979-1008

Abstract: This article argues that the causes of the crisis in Romania and other new EU member states were different from those affecting Western Europe or the US. The main argument of this paper is that bad domestic monetary, fiscal and regulatory policies were the real crisis generators, while exogenous crisis mechanisms, including contagion from the global financial crisis, were just the trigger. Romania, and other new EU member states, has been facing the crisis of a consumption-led development model, not just a financial crisis imported from more developed economies. This paper brings insights into the impact of the flat-tax regime on consumption and the impact of speculative capital inflows disguised as foreign direct investments.

Date: 2013
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DOI: 10.1080/09692290.2012.733315

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