Features of Investments’ Dynamics During Romania’s Second Transition to Market Economy

This paper studies as first objective the correlation between investments and gross domestic product thereby showing the procyclical behaviour of investments’ flows during the second transition of Romania to market economy (1990–2004). Next, the investigation is further extended by applying Lewis duality concept in a transformational context. The authors identify the time interval in which the respective duality was effective and the year when the private initiative became dominant in the field of investments. A special attention is paid, hence, to the identification of the modelling factors of the public, private, and total investments dynamics. In this way, it is possible to emphasize the inertia of the private and public investments, respectively, when the substitution between the public and the private investments took place in the Romanian economy. In the same time, the analysis reveals that the total investments’ dynamics was significantly influenced by the near-past private investments’ behaviour and the current economic situation.