This paper discusses the impact of a gradual, pre-announced significant increase of the minimum wage during 2013-16 in Romania. The main finding is that the positive effects prevail when the starting level of increase in the minimum wage is very low and the economy is in a negative output gap....

We provide empirical evidence to support the calibration of a limit on household indebtedness levels, in the form of a cap on the debt-service-to-income (DSTI) ratio, in order to reduce the probability of borrower defaults in Romania. The analysis establishes two findings that are new to the...