ABSTRACT
The legacy of the previous decade is a sine qua non starting point for analysis in order to get a firmer grasp of the main processes and phenomena occurring after December 1989 in Romania. The eighties offered an example of shock therapy - as a balance of payments adjustment - undertaken in a command economy. Direct controls were used to cut domestic absorption to the largest possible extent. This forced adjustment can be seen as an 'internalisation' of external disequilibria that entailed increased domestic disequilibria, both open and hidden. If one conceives an optimum degree of internalisation (which would indicate the composition of external and internal disequilibria that policymakers should aim at in order to minimise the cumulated costs of imbalances for the economy) an obvious overtaxation of domestic absorption took place during those years.
