The Decapitalization of the Business Companies in Romania

Abstract

The experience of the Latin – American countries, and more recently, of the countries in the Eastern Europe, has proved that the periods of huge economic instability are associated to inflationary phenomena (that can degenerate into hyper – or mega inflation). Despite some attempts to weaken the negative effects of the inflation, the history of the last century stands as a living proof that the financial vulnerability of an economy, manifested through inflation, generally leads to strong imbalances both at a social level as well as at an economic one. Most of the economic agents become aware rather late of the inflationist shocks and do not become accustomed to them, and therefore such differences as those between business companies and the members of a society will come out. As expected, some governments can control the economic process during times of creeping inflation, but the price of the success is usually paid by the large mass of the private consumers. Since all the economic measures are expressed through monetary unities, any change of prices will make its presence felt in the financial structure of the economic activit y, in the budget of the incomes and of the costs, and last but not least, in their economic - monetary equilibrium. Inflation touches directly upon the monetary – bookkeeping information used by the leading team in the decision activity, thus bringing about the decrease of its credibility as well as the possibility, in many cases, to wrongly tackle the developing strategies of the companies. At the same time, laying taxes upon the positive nominal incomes as well as on the real - valued negative incomes will result in the decapitalization of the business companies, phenomena also known under the name of ‘the run off of the capital’