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• Financial hegemony in Hungary?

  105-132

  Ferenc Kun

  Views:

  98

  The theory of financial hegemony argues that the centralization of the financial sector allows for coordinated decision making over the disposition of investment capital. Because of the importance of outside funding in fueling economic expansion and weathering ongoing economic crises, such centralized decision-making over capital flows confers upon the financial leadership the capacity to coordinate activity ampng a wide range of economic actors. In theis paper I test the statements of the above theory in the network of the interlocking Board of Directors memberships within the best 100 companis and 36 banks in Hungary.

• The Risks of Global Financial Markets and the Importance of Credibility: Implications for Hungarian Fiscal Policy

  27-44

  Dora Gyorffy

  Views:

  90

  The central issue in the controversy about the adoption of the euro in Hungary is the difficulties associated with the fulfillment of the fiscal criterion and the possible growth sacrifice it requires. In this paper the author examines the question whether the strategy of delaying entry into the euro-zone implies that fiscal consolidation can be delayed as well. In approaching the problem the paper considers the origins and history of the present-day global financial markets and argues that given the high degree of systemic risks individual countries face responsible macroeconomic policies are crucial in minimizing vulnerability to
  crises. Consequently in order to avoid excessive interest rates and speculative inflows (or currency crisis in the worst case scenario) fiscal deficits in Hungary would have to be cut and credibility of fiscal policy reestablished even without EMU accession. The overall conclusion from this overview is that delaying entry in order to delay fiscal adjustment is likely to increase the trade off between real and nominal convergence instead of mitigating it.

  JEL classification: F33, F41, H62

• The Relevance of the Washington Consensus for the Post-communist Countries

  5-25

  Peter Mihalyi

  Views:

  217

  The Washington Consensus (WC) is 20 years old now. With hindsight, its main significance is the unification of the normative economics. Prior to the WC, it was widely accepted that different policies should be pursued in the developed and in the underdeveloped economies. It was a sheer coincidence that the emergence of WC occurred a few months before the collapse of the communist systems of Eastern Europe and the Soviet Union. Many scholars believe that the WC is responsible for the recurring economic crisis of the last two decades. I reject this view. A 200-year track record confirms that depressions and financial crisis have been always the intrinsic components of market economies – for the reasons identified by Marx and Schumpeter long time ago.

  Journal of Economic Literature (JEL) classification: F02, F23, F41, P11, P36

• Több hitel, nagyobb kockázat

  185-200

  Balazs Csonto

  Dora Siklos

  Views:

  151

  The main goal of this paper is to analyse the characteristics of the rapid credit growth in Hungary in recent years. The availability of credit is crucial for households who want to smooth their consumption and for firms, while the amount of credit affects the monetary transmission mechanism and financial stability risks. We analyse the reasons for the credit expansion and demonstrate that the increase in the amount of credit can improve the efficiency of the monetary transmission mechanism, We analyse the micro risks induced by credit growth. Finally we demonstrate Krugman's model (1999) in connection with the Asian crises and then we try to prove that the growth of foregin-currency denominated credit decreases the ability of monetary policy to affect aggregate demand.

  Journal of Economic Literature (JEL) classification: E51.

• Policy (Institutional) Diversity and Economic Development

  5-31

  Daniel Daianu

  Views:

  88

  Diversity, or variety, is the essence of economic life in the sense of underlying choice; economic calculation gives numerical substance to how people make choices in their daily endeavours, either as consumers or entrepreneurs. How does variety/diversity takes shape in the realm of institutions and policy making? Is the range of choices open-ended? The last couple of decades has revealed an overwhelming offensive of the neo-liberal paradigm in
  terms of defining “best practices”. Even language was shaped accordingly with market reforms being seen in a quasi-single theoretical and policy framework. Are we heading towards increasing uniformity with regard to institutional and policy set ups, worldwide? An affirmative answer would underline the successful market based transformation of a series of command economies. Some convergence between institutional patterns in the USA and the
  EU economies might be alluded to in the same vein A supportive argument for this line of reasoning could be that what matters for individual achievement, in the end, are equal opportunities. But this argument can be turned around when debating the merits of various institutional set ups in terms of creating fair chances for people. A sceptical answer would highlight the mounting challenges which confront societies, whether rich and poor, and the international community in general –in spite of the high hopes of not long ago. The demise of the “New Economy”, the series of corporate scandals in wealthy economies and the subsequent recourse to new regulatory legislation, recurrent financial and currency crises throughout the world, and the controversies surrounding the activity of IFIs, should compel “ideologues”, of all sorts, to be more humble in their prescriptions. This essay argues that there is substantial scope for institutional and policy diversity to operate as a means to foster economic development; that there might be a paradigmatic cycle in the dynamic of economic policies.