The Hungarian Model: Hungarian Crisis Management in View of the Mediterranean Way

Matolcsy, György; Palotai, Dániel

doi:10.25201/fer.17.2.542

Cited by 9 publications

(10 citation statements)

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“…The primary objective of this paper is to present the main achievements of the current convergence process. The measures supporting the realisation of results have already been presented in detail in previous papers (see, for example, MNB 2017a and Matolcsy -Palotai 2018), and thus we describe those here only to the degree necessary for evaluating the results. The paper is structured as follows: First we depict the baseline, i.e.…”

Section: Introductionmentioning

confidence: 88%

Hungary Is on the Path to Convergence

Matolcsy¹,

Palotai²

2019

Financial and Economic Review

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After 2010, Hungary achieved exceptional economic results both by Hungarian and international standards, and thus the Hungarian economy has become one of the growth engines of the European Union. Hungary's economic policy measures successfully placed the country on the path to convergence, bringing the country to the forefront of the European Union in areas such as raising the employment rate, decreasing unemployment, improving the budget balance and government debt, and restoring external equilibrium. As a result of this, the Hungarian economy has sufficient stability and reserves to implement a turnaround in competitiveness, which may be achieved by targeted measures. This paper reviews Hungary's macroeconomic achievements that are outstanding also by international standards and based on which sustainable convergence of the national economy can be ensured.

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Section: Introductionmentioning

confidence: 88%

Hungary Is on the Path to Convergence

Matolcsy¹,

Palotai²

2019

Financial and Economic Review

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“…When household loans denominated in foreign currencies were being phased out, the MNB took a pro-active role in the negotiations between the government and the Hungarian Banking Association, and after that, it substantially contributed to the conversion of foreign currency-denominated household loans into Hungarian forint-denominated ones by providing the required foreign currency liquidity (9 billion euro) for the banking sector . By the end of 2015, the balance of Hungarian households had practically no foreign currency-denominated loans, and this risk was eliminated once and for all from the Hungarian economy (for more details, see Matolcsy & Palotai, 2018) .…”

Section: The Central Banking Regime Change After 2013mentioning

confidence: 99%

Outline of the Evolution of the Hungarian Monetary Policy from the Restoration of the Two-level Banking System to the Present Day

Lentner¹

2021

PGAF LR

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This study outlines the development of Hungary’s monetary policy, and the course and changes in its objectives and instruments since the beginning of the market economy transition in the late 1980s. The author’s basic thesis is that the period since the two-level banking system was reinstated after four decades of a planned economy system, in 1987, can be basically divided into three development phases with significantly different characteristics. The first phase was an ‘attempt to introduce’ an imported monetary mechanism, or perhaps an urge to comply with it, while the second phase was an approach of a monetary regime change launched in 2013 and supporting economic growth and financial stability strongly and directly, which lasted until the appearance of the traumatic elements of the Covid-19 pandemic crisis. The third phase is evolving today, under the circumstances of adapting to the conditions of the real essence of the twenty-first century, i.e. a new type of international competitiveness, which is pursued by the Central Bank of Hungary as stipulated by the Fundamental Law and the cardinal Central Bank Act of Hungary.

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“…The measures focused exclusively on the supply side of the economy, putting an additional squeeze on the already sluggish demand through austerity. However, measures focused on the supply side could not be successful, because policy-makers applying fiscal austerity significantly underestimated the size of the fiscal multiplier (the growth effect of a unit of government action) and its devastating force in an environment of recession (Matolcsy, 2018). Despite the gov-ernment's cutbacks on fiscal expenditures, fiscal consolidation was undermined by lower tax revenues due to the accompanying contraction in internal demand, which was even accelerated by the measures.…”

Section: Figure 1: Credit-to-gdp Ratio In Hungarymentioning

confidence: 99%

“…Additionally, despite the availability of EU funds, investments saw an even greater fall than consumption overall, further reducing Hungary's potential growth. On the whole, due to the high fiscal multiplier resulting from the crisis environment, the role of fiscal policy in the post-crisis decline proved to be decisive (Matolcsy, 2018).…”

Section: Figure 1: Credit-to-gdp Ratio In Hungarymentioning

confidence: 99%

Successful Crisis Management in the Light of the Twelve Economic Turnarounds

Matolcsy¹

2019

Polgári szemle

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In 2019, now more than a decade after the global economic crisis of 2008-2009, it is appropriate to look back on the events of the period, which was one with a major bearing on economic history. The complex challenges emerging in the aftermath of the global economic crisis and the answers given to them remain fundamental determinants of our daily lives to this day. Moreover, as on a number of occasions in the course of history, the economic crisis also challenged the dominant trends in connection with the development of economics as a science. The very first and perhaps the most important reference point in the debates was the way in which to manage the crisis. According to neoliberalism, the former predominant school of economic thought, short-term salvation could be found by supply-side reforms causing demand to decline, a view which was increasingly challenged over time by economists seeking a broad distribution of Keynesian economic stimulus and the burdens of reform. Hungary is a country where this debate and its consequences have been quite spectacular.Due to the flawed economic policy pursued before the crisis, the global storm of 2008-2009 hit an extremely weakened Hungary. As a result of that and the flawed crisis management based on neoliberal foundations that predominated the period, Hungary suffered one of the worst crises seen in Europe up to 2010. In the aftermath of the severe damage, the civic government entering office in 2010 announced a new approach to crisis management. Building on coordination between branches of economic policy, the strategy adopting a combination of innovative, conventional and unconventional measures successfully stabilised Hungary, setting the country on Dr György Matolcsy, the Governor of the Magyar Nemzeti Bank (governor@ mnb.hu).György Matolcsy: Successful Crisis Management in the Light of the Twelve Economic... a new path of convergence. This paper provides an overview of the most important steps and achievements of that crisis management.

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The Hungarian Model: Hungarian Crisis Management in View of the Mediterranean Way

Cited by 9 publications

References 9 publications

Hungary Is on the Path to Convergence

Hungary Is on the Path to Convergence

Outline of the Evolution of the Hungarian Monetary Policy from the Restoration of the Two-level Banking System to the Present Day

Successful Crisis Management in the Light of the Twelve Economic Turnarounds

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