Revista Tinerilor Economiºti (The Young Economists Journal)

Revista Tinerilor Economişti (The Young Economists Journal)
consumption growth was not followed by employment growth.
Based on the statistical analysis carried out with the Pearson correlation
coefficient we can notice that consumption, as the main component of aggregate
demand, in Romania, does not influence positively the level of employment. The
negative value of the Pearson correlation coefficient of -0.595 proves that between the
two economic variables there is a inverse relationship, of average intensity, fact that is
in contradiction with the Keynes’s theory according to which employment growth is
caused by consumption growth and the other way around (between the two variables,
regularly being a direct relationship).
Source: Own calculations based on the data in Annexe no. 1
Figure no. 3 Inverse correlation between final consumption and civil employment,1990-2009
Taking into consideration that, in Romania, in the analysed period, the
consumption growth did not cause the employed population growth, on the contrary there
was a decrease of the employed population, in our opinion stimulating consumption in
Romania aiming to increase the level of employment is not the best solution [1].
In order to support this statement we mention the fact that meeting consumption
needs, is done by the consumption of domestically produced products as well as the
consumption of imported products. Based on the statistical data on the evolution of
consumer goods import we can notice that, in Romania, the contribution of the imported
consumer goods to meeting the domestic demand for consumer goods lately, and not
only, has increased significantly. Thus, in the 2002-2009 period, an increase in the
imported consumer goods of 2.5 times was recorded, from 2782.2 mil euro to 7038 mil
euro [8], thing that reflects the high preference for the consumption of these goods.
Meeting consumption by means of the imported consumer goods does not
provide the necessary conditions for job creation in our country, because the reduction
of the domestic supply for goods and services by substituting domestic output with the
supply coming from imports has as a result the employment reduction. Therefore, the
growth of import may equal the loss of jobs internally, importing not only goods and
services but also unemployment, and other macroeconomic disequilibrium: deficit of
trade balance and balance of payments, national currency depreciation etc.
The negative relationship between employment and consumption can be
explained by the factors that lay at the foundation of consumption growth in Romania.
Consumption is caused by a series of factors, such as: disposable income, general level of
prices, fiscal policy, interest rate etc.
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