Transformations  in
Business & Economics

Challenges for the Romanian Economic Research in the Context of the Global Economic and Financial Crisis

JEL classification: Y20.

Most of the articles presented in this special Supplement of Transformations in Business & Economics are written by Romanian researchers and addresses the various aspects of economic developments in Romania in the context of economic and global financial crisis. Therefore, we believe it is important to preface this special issue with a brief overview of economic, political and social transformations in Romania in the last year.

Like other countries in Eastern Europe, Romania has suffered for almost 45 years from the period of communist dictatorship, which had imposed a centralized economy that left no possibilities for expression of free market forces. This period has been over dramatically in December 1989, when a popular uprising that began in Timisoara and continued in Bucharest led to the fall of the communist regime of Nicolae Ceausescu and to the establishment of a democratic regime based on the multiparty system and market economy.

Period after the Romanian Revolution of December 1989 was, in economic terms, the time when the country’s economic growth and recession have succeeded (Zaharia and Grundey, 2009). The first 10 years after the fall of the communist regime were the years of profound structural transformations in the political, economic, social and legal terms. These preconditions had negative consequences in the standard of living of the majority of the Romanian population, which led to the appearance of wealth acquired fraudulently and have shaken public confidence in the democratic state structures.

During the period of 2000-2007, Romania registered constant positive improvements, both in terms of macroeconomic indicators, as well as the development of state institutions and the civil society. Social costs of transition, accumulated in ‘90s, exceeded expectations. Structural unemployment, external debt, financial blockage, the size of the underground economy, the depreciation of the state of general health of the population, weak economic situation for some categories of population and the emergence of speculative operations, including in banking activity, occurred most often in and on the expense of the real economy. New imbalances have appeared imposed by instability factors, which, under the influence of the economic boom of the early years of this century, have been underestimated, believing that the economy has the ability of self-sustaining and overcoming these costs. After a period of unprecedented growth in the Romanian history of post-communism, the economic setbacks of 2009 shook the confidence of people in a strong economy, able to deal with such severe challenges as those induced by global economic contraction.

The current economic crisis as evaluated by most experts is the worst from of the Depression of the ‘30s of the last century, has affected the Romanian economy, in a proportion that any international financial institutions or Romanian authorities had ever imagined. Extremely encouraging forecasts predicted by specialists for the Romanian economy have been recalled by the emerging tendencies in the global economy now under the effects of the crisis. The most prestigious institutions have adjusted their estimates monthly, during 2008 and especially 2009. IMF, the World Bank or the rating agencies, and also prominent economists have recognized the limits of statistical and mathematical instruments in predicting the evolution of economic indicators over a period of profound crisis as that triggered in recent years.

Economists failed to predict the crisis, in essence, because they refused to acknowledge untidy realities that would mess with their elegant mathematical models. “Unfortunately, this romanticized and sanitized vision of the economy (capitalism) led most economists to ignore all the things that can go wrong. They turned a blind eye to the limitations of human rationality that often lead to bubbles and busts; to the problems of institutions that run amok; to the imperfections of markets – especially financial markets – that can cause the economy’s operating system to undergo sudden, unpredictable crashes; and to the dangers created when regulators don’t believe in regulation” (Krugman, 2009).

During recent years, governments that have succeeded in driving Romania have rather tried to share management positions between representatives of parliamentary parties that made up the majority, instead of complying with the EU requirements, addressing political corruption, strengthening the independence of the judiciary, introducing lustration or protecting the country against the international economic crisis (Stan and Zaharia, 2009). In the current global context in which uncertainties became certainty and uncertainty, the state of normality, academic preoccupations in the field of economics are asked to become less as abstract scientific studies and more as alternative policy proposals.

This Supplement contains theoretical contributions, with practical value, mainly from the academics from Romania, covering a vast theme, from financial issues to issues related to the theory of stakeholders and academia. Research works conducted by the authors are part of the studies conducted under the auspices of national research grants, through which Romanian academic research wants to get noticed and promoted at national and international level as a responsible voice, able to offer advices and relevant solutions recognized by the entire international scientific community. A notable contribution is of professors from the Bucharest Academy of Economic Studies (BAES), the most prestigious economic university in Romania, and especially of those from the Faculty of International Business and Economics. They, by research conducted under national and international grants, want to raise the performance of economic academic research from Romania.

With 10 Faculties on economics, nearly 1,000 professors and over 40,000 students in Bachelor, Master and Doctoral Programs, Bucharest Academy of Economic Studies is the largest economic university in Europe. In the last 5 years, this university has tried to convert quantity into quality, moving the focus from teaching activities to research activities (Dragan et al., 2008).

Current and future concerns of scientists from BAES cover a wide spectrum of economic issues: the causes of the current global financial and economic crisis and its implications on the Romanian economy, sustainable development and vulnerability launched by globalization, companies’ responsibility vs. companies’ sustainability, role of academic research in generating economic growth, economic theory, and prospects for interdisciplinary research in the area of economics.

The opportunity offered by the Transformation in Business and Economics (TIBE) Journal is a great opportunity for the academic community from BAES and Romania, to be acknowledged at the international level. Without the kindness and hard work submitted by the editorial staff of the TIBE, such approach could not succeed. The authors wish to thank, on this occasion, to the Editorial Board of TIBE Journal and the Publishing House of Vilnius University for the chance offered to publish their contributions in the pages of this prestigious academic journal.

References

• Dragan, G., Zaharia R., Zaharia R.M. (2008), „The Academy of Economic Studies Image on the Labour Market”, Studia i Prace Wydzialu Nauk Ekonomicznych i Zarzadzania, No. 4, pp. 75-84.
• Krugman, P. (2009), “How Did Economists Get It So Wrong?”, The New York Times, September 6, 2009, available at http://www.nytimes.com/2009/09/06/magazine/06Economic-t.html?_r=1&hp, (referred on 02/01/2010).
• Stan, L., Zaharia, R. (2009), „Romania”, European Journal of Political Research, Volume 48, Number 7-8, pp. 1087-1099.
• Zaharia, R., Grundey, D. (2009), „On transformational Environment of Romanian Market Competitiveness and Application of Marketing Techniques”, Transformations in Business & Economics, Vol. 8, No. 3 (18), Supplement A, pp. 19-20.