Central Bank governor agrees with Romanian rapper on money spending: Many have won Nobel prizes on this topic

When it comes to the relation between savings and consumption, Romanian Central Bank BNR governor Mugur Isarescu agrees with the lyrics of the song Baga Bani (Spend Money), launched last summer by Romanian rapped Puya and Don Baxter (listen to the song below). When asking the BNR governor how does the Central Bank see the dilemma between consumption and savings, a Romanian journalist quoted the lyrics of Puya’s song: “When you have millions, you are the best/ But that’s not all/When your soul is laughing, you don’t need much/ You know money never stays/ You make millions/You’re the best/ You have to live/ Instead of saving them/ You’d better spend them”. The journalist said he used this question to help the governor send his message easier. The governor agreed this is was dilemma for which many have won Nobel prizes. “Nobel prizes were given on this subject on the relation between savings and consumption, in an often conflicting manner, as it happens in the economy: one said something and got the Nobel prize and the other said the opposite and also got the prize. We can believe and give credit to Puya, or how you called him, I didn’t know his name. When I said, if it is to be precise, that we don’t want to push too much on the pedal, I said we don’t want to discourage savings very much,” said Isarescu, quoted by news agency Mediafax. He added that BNR is cautious when it comes to cutting the interest rate and its impact on the money market. Also, the governor added that saving in Romania is very much based on trust. The Romanian government wants to increase consumption through a planned support scheme for Romanian individuals with debts to banks and monthly incomes under the average wage. More about the recent key interest rate cut in Romania. Irina Popescu, irina.popescu@romania-insider.com