Inflation control and operational risks of the monetary policy

 Inflation is an analysis topic of great interest for both specialists and the general public as it disturbs the allocation of resources and the income distribution in society. This is why the inflationary process was often a reason of controversies among experts and its approach raised frequent changes of views and/or doctrinal positions. These controversies arouse the interest of researchers and place the inflation theme in a central area of economics.

Based on the economic situation in which inflation seemed to threaten both through effects and causes the chances of Romania's economic recovery, respectively the transition through the next stages of the EU integration, we carried out a thorough analysis of the connections and influences in the inflationary process in our country. The purpose of this analysis is to try to highlight some landmarks of the inflationary process in Romania, which are temporary, structural, subjective (perceptions of the population), territorial and related to the labour market.

The paper also carries out a test of the main econometric equations that make up the arsenal of a central bank in the inflation targeting strategy: the equation of aggregate demand, the equation of aggregate supply (Phillips curve type) and the equation of the reaction function of the central bank.