This paper analyzes the response of the Romanian economy to supply and demand shocks in order to assess the degree of structural heterogeneity. Interest for this work lays in the fact that Romania as well as other emergent countries such Poland, Czech Republic or Hungary, intends to join the Monetary Union. Some empirical studies investigated the benefits and costs of adhering to the Euro Zone according to the degree of structural heterogeneity. For this purpose we engage a type of dynamic stochastic general equilibrium (DSGE) model based on optimizing behaviour of economic agents, starting from microeconomic foundations incorporating nominal rigidities in prices. In this analysis we use various parameterizations of the DSGE model based on different estimates of the monetary policy rules.
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