2017: Journal no. 1 & 2

ASSESSMENT OF ILLEGAL CAPITAL FLOWS IN THE REPUBLIC OF MOLDOVA

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Authors:  
Tatiana PETROVA, Researcher, National Institute for Economic Research, Moldova
Victoria IORDACHI, PhD, Associate Professor, National Institute for Economic Research, Moldova
Dorina CLICHICI, PhD, Senior researcher III, Institute for World Economy, Romania

This paper analyses the existent methodologies used in international practice to estimate illegalcapital outflows. Also, authors carried out an assessment of the illegal capital outflows in the Republic ofMoldova on the basis of two models: the general method based on the balance of payments and the WorldBank’s “residual” model. The paper reflects the exceptional situation of the financial system of theRepublic of Moldova and trends in evolution of capital flows. The analysis of illegal flows should be partof the monitoring system of the country’s financial stability, which will allow identifying in time negativetrends that threaten Moldova’s financial security. The main research methods were systemic analysis andlogic synthesis; data analysis and interpretation; statistical methods, etc. The main conclusionsobtained within the research of this topic are: for more reliable estimates for analytical purposes, it isnecessary to develop an adequate methodological base that would help to measure and analyze shadowcross-border flows; for the assessment of the financial security of the Republic of Moldova, as a transitioneconomy, it is important to monitor, analyze and forecast a broader list of financial indicators, as well astheir critical values.

Keywords:  
capital outflow; illegal flows, balance of payments; financial stability, capital flight, World Bank, Residual model, Trade misinvoicing model.