Statistical evaluation of the degree of nominal convergence of the inflation rate in Romania

Nominal convergence is a process that is characterised by the gradual harmonisation, to a relatively high degree, of the national institutions and policies of the Member States with those of the EU, in the monetary and financial fields.The birth of nominal convergence is marked by the Maastricht Treaty, by means of which the criteria required for adopting the euro were established. One of the criteria refers to price stability (inflation rate), which is measured by the Harmonised Index of Consumer Prices. A Member State meets this criterion if it has a price performance that is sustainable and an average rate of inflation, observed over a period of one year before the examination,that does not exceed by more than 1.5 percentage point that of, at most, the three best performing Member States in terms of price stability.The article proposes a model for the statistical evaluation of the degree to which the nominal convergence criterion related to price stability is met. The evaluation is based on the following pillars: a theoretical synthesis of the Harmonised Index of Consumer Prices, a statistical analysis concerning the evolution of inflation in Romania and the gap vis-à-vis the reference value for meeting the nominal convergence criterion.