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• Human capital and institutions in the early models of endogenous theory of growth

  135-149

  Pal Czegledi

  Views:

  189

  The endogenous theory of growth, or, as it is often called, the new theory of growth has become a fully-developed theory within about twenty years. The original goal of the theory was to offer better explanations for facts than traditional theories. However, this was only partly achieved. If this is so, then what are the proceeds of the whole theory? The study aims at proving that though the endogenous theory does not offer a much better explanation for facts, it has deepened our understanding of economic growth and incorporated factors in the formal theory, which so far have only been dealt with by "softer" branches of the theory of growth.

• A Journey Through the Theory of Economic Development

  Lavinia Sidonia Delcea

  Views:

  115

  The theory of development economics changed signifcantly from the first attempts of defining the concepts in the 50s until nowadays. The contributions to the development theory are at the same time closely related to the historical context of the underdeveloped and developing countries. This paper tries to facilitate the understanding of the way development economics evolved, by presenting the main contributions to the theory. The research methodology used in this study is analytical, based on the gatherinf of the information, its organisation in a logical way, the presentation and analysis of the most significant ones, and finally the drawing of relevant conclusions. The main findings of this paper are that after five decades of strong ideas and recipes of economic development we have reached a point of uncertainty regarding what is beneficial or harmful for the nations' economic development.

  Journal of Economic Literature (JEL) classification: O10.

• The Economic Theory of Clubs

  64-85

  Nora Ilona Elek

  Views:

  169

  Defining club goods allows an analysis of goods that possess neither pure public goods nor pure private goods characteristics. This is the main significance of the economic theory of clubs. The present paper categorises club good among goods in general on the basis of the relevant literature, and specifies the core elements of a definition of clubs and club goods. Then, by summarizing the most important articles on the subject, this paper delineates fundamental questions and models of club theory. Finally, supporting the relevant practical issues of club theory, this study describes economic fields where the theory has been applied.

  Journal of Economic Literature (JEL) classification: H41, H49

• A német transzferrendszer mint a gazdasági visszaesés okozója

  Agnes Orosz

  Views:

  178

  According to the theory of optimal currency areas the most important advantage of monetary integration is its positive effect on economic growth. However, examining Germany we can notice that since German reunification economic growth and the convergence between East and West Germany has slowed down. These facts show that the operation of the German currency union is not optimal and its performance has not improved over the last twenty years. The criteria of the optimal currency area theory is endogenous due to the recent development of the theory. This means that a country is more likely to satisfy the criteria for entry into a curreny union ex post than ex ante. In the case of Germany, examining the trends of economic growth we can conclude the the German currency union has not become optimal in the last two decades. These facts raise the puzzling question of what are the specific circumstances hindering the improvement if Germany's monetary union despite the endogeneity of the optimal currency area criteria. To answer this question the study examines the interactions between monetary and political integration with special attention to the issues of fiscal policy. According to the study the German transfer system and the dependency on transfers explain the discrepancy between theory and empirics.

  Journal of Economic Literature (JEL) classification: E42, E62, E63, F01, F31, F36

• The conceptual inconsistency of the rational anticipation theory

  103-126

  Peter Galbacs

  Views:

  251

  In this article we analyse various contradictions in the assumptions and consquences forming the theory of rational expectations. The argument aims to demonstrate that important parts of the theory cannot be maintained at the same time without damaging the theory's logical structure, while we recognize that other parts force the theory far from the basis of reality. However, the rational ecpectations hypothesis is not simply a useless theoretical construct, since by delineating the proper boundaries of this hypothesis we can offer a clear justification for the operability of inflation targeting systems. If we relax the strong presumptions, giving a place to a monetary authority that is able and calculated to drive by Muth, although some consequences of this conception will be consistent with the assumptions - which depend on conditions that seem not to hold - of the original (strong) definition.

  Journal of Economic Literature (JEL) codes: B2, E5.

• From mud-hut to microprocessors: The unified growth theory

  29-50

  Peter Foldvari

  Views:

  112

  The Unified Growth Theory attempts to explain economic growth in the long run within a single framework. Accordingly, it is expected that a successful unified theory is capable of modeling the transition among different economic regimes. In this study, after identifying the main features of the three growth regimes (Mathusian, post-Malthusian and sustained economic growth), we review two typical unified growth theories. While the Hansen-Prescott model seeks to explain how the transition occurred, the Galor-Weil model focuses on the causes and interrelatedness of the observed phenomena.

  JEL classification: N10, O41

• Individual Values for Organizational Success

  37-51

  Ildiko Ando

  Views:

  114

  Douglas McGregor published Theory Y in 1960. The main element of this theory is integration of individual and organizational objectives. Today, near 50 years later, the integration of individual and organizational goals remians only theory in several business organizations. The author of this study conducted an online survey in 2008 in order to examine company cultures, values was harmonization between organizational-level and individual-level sets of values. Two multinational companies with 324 respondents took part in the research up to this time. This publication shows the findings of the survey and illustrates the importance of harmonization between organizational-level and individual-level values. Finally, it comes up with some ideas what leaders can do in order to harmonize the value hierarchies efficiently in their organizations.

  JEL classification: D21, L21, L25

• Citizens’ Interest Index: What can act as a benchmark for the results of the New Public Management reforms?

  117-131

  Miklos Rosta

  Views:

  114

  The aim of the study is to suggest an adequate indicator to describe comprehensively the efficiency of New Public Management (NPM) at a macro level by using the economic roots of NPM. The scientific community has not yet found a comprehensive indicator to measure the efficiency of the given school; however NPM is at the stage of its lifecycle when these researches really do need to be conducted. Both the political-theoretical and the economic roots of NPM are closely connected to public choice theory; this theory thus provides the bases of the model for creating the new indicator. In the article we do not only introduce the created composite index at an abstract level, but also present its formulation and methodological background.

  Journal of Economic Literature (JEL) classifications: H83, D70, D23

• Growth theory from an Austiran institutional perspective

  157-174

  Pal Czegledi

  Views:

  111

  Perhaps the one fundamental question of growth theory is why some countries are poor while others are rich. The paper identifies two main lines of research approaching this question, by applying the social analysis of Williamson, and points out that both approaches give an asymmetric answer. The paper applies a critique, which was formulated in the theory of the firm, and compares it with a transaction cost approach. According to this critique, the one approach to economic growth lays too much emphasis on technology, while the other neglects the technological side and emphasizes only the transaction costs and incentives. This paper argues that a new approach, based on the insights of modern Austrian economics, is able to integrate these two sides.

• The option value of education

  131-148

  Judit T. Kiss

  Views:

  86

  Within the theoretical frameworks of standard human capital theory countless analyses have been carried out into investment decisions, in which the examination of the uncertainty of the costs and benefits of education were mostly disregarded and an assessment of the option opportunities was often omitted. In this essay we tried to review one of the extension opportunities of the theory of standard human capital and the option approach of human capital investment. We looked for an answer to the question of what kind of models have been developed for the interpretation of education as an option and for the determination of the option value of the investment. In the study we have highlighted the fact that a decrease in uncertainty in human capital investment is as good an incentive for investing in more education as the public subsidization of education.

  JEL classification: C6, D8, I2, J2

• Political leadership and economic growth: Do the leaders matter? A vezető személye számít?

  101-116

  Dora Zolcsak

  Views:

  151

  The paper analyses the role political leadership plays in economic growth by reviewing the literature that argues for, or presents evidence on, the proposition that leadership and the leader him/herself are crucial factors in economic growth. The article considers institutional economics as a starting point, a field which, so far, has paid little attention to the role of individuals and only focuses on the significance of institutions. The institutional theory of economic development has been criticized for using endogenous indicators and for only emphasising political output. However, political leaders are also able to make good and efficient economic policies. That is the reason leaders do matter

  Journal of Economic Literature (JEL) Classification: B3, O4, P48

• Reflections on the 100th anniversary of the birth of Sir J. R. Hicks (1904-1989)

  167-175

  Balazs Palosi-Nemeth

  Views:

  98

  Several major articles have been published recently reviewing or reconsidering the result of Nobel prize winning economists on the occasion of an anniversary. This study has the same objective. John Richard Hicks was born on April 8th 1904 in Leamington Spa, England. We commemorate his work from a peculiar perspective on the 100th anniversry of his birth. We focus on where the roots of the history of the "theory of finance" are to be from, what influence Hicks had on the pioneering work in this field, as well as how his results - with particular attention to the interpretation of risk - have been modified by succeeding generations.

• A comparison of efforts to set up cluster initiatives in two Hungarian regions – submitted cluster proposals in North Hungary and the Northern Great Plain

  133-140

  Mate Pecze

  Views:

  109

  The Hungarian government has taken the initiative to finance the formation of new entrepreneurial co-operations using the cluster theory. It is not certain whether or not the Hungarian economy is ready for an initiative such as this. In North Hungary and the Northern Great Plain (two Hungarian NUTS 2 regions) project teams set up fresh clusters to obtain the subsidy – as in other regions. Their level of cooperation, the number of submitted projects and the ratio of successful projects tell us if theory and the western practice fit with the local needs - if Hungarian companies want to work and can be successful in clusters or not. In this article I examine the willingness of regional business actors to cooperate and start new business networks in the framework of the 2008 regional cluster calls. The two regions have similar but not identical results.

  JEL classification: R58, L2

• Allocation Of Residual Income Rights Under Internal Governance Empirical Results from the Hungarian Trucking Industry

  Joseph Windsperger

  Maria Jell

  Views:

  106

  The paper offers a property rights and monitoring cost explanation for the allocation of residual income rights between the carriers and truck drivers under internal governance. First, by applying property rights theory, we argue that the structure of residual income rights depends on the importance of noncontractible (intangible) assets of the truck driver to generate a residual surplus. The more important the truck driver’s intangible knowledge
  assets, the more residual income rights should be transferred to him. In addition, we controlled for the monitoring costs as an additional explanatory variable of the allocation of residual income rights. According to agency theory, the higher the variable proportion of the driver’s income, the higher the monitoring costs.These hypotheses were tested by using data from the Hungarian trucking industry. The empirical results are supportive of the hypotheses.

  JEL- Index: G32, M2

• The role of the voluntary unemployment insurance system in the trade union movement

  43-70

  Nora Ilona Elek

  Views:

  232

  The purpose of this study is to analyse the institutional environment of the state-subsidised, trade union-managed national voluntary unemployment insurance system (the so-called Ghent-system) that influences the selective incentive feature of this system based on the literature. Another goal is to run cluster analysis in order to show whether Ghent-countries – Denmark, Finland and Sweden – differ from other countries based on this environment. The analysis is based on Olson’s (1965) concept of by-product theory. The essence of this theory is that large groups are able to increase, maintain and thus realize their lobbying activities by applying incentives to individuals. In the case of trade unions, the availability of voluntary unemployment insurance is a significant incentive. Its impact on trade union movement is usually analysed as a dummy variable, but this article focuses on institutions that are important to the Ghent-system.

  Journal of Economic Literature (JEL) code: J51

• Financial hegemony in Hungary?

  105-132

  Ferenc Kun

  Views:

  104

  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 improvement and the new manifestation of the Veblenian conspicuous consumption theory

  23-35

  Karmen Kovacs

  Views:

  377

  This paper focuses on how the Veblenian conspicuous consumption theory has been developed further by the theorists of modern economics. The connection between status, status goods and conspicuous consumption is underlined in the discussion. It is emphasized that the price has a multiple role, however, the hypothesized positive relation between price and quantity is not necessarily valid. The wide-ranging motivations and consequences of conspicuous consumption are also analyzed. Finally, the new features of conspicuous consumption are discussed, that is, instead of wasting money on goods, cultural capital and taste have become the core of conspicuous consumption, and instead of focusing on wealth, the contexts of income have become relevant.

  Journal of Economic Literature (JEL) Codes: D11, Z13

• Competitive adavntages: Theory and corporate practice

  51-70

  Gabor Hovanyi

  Views:

  145

  The competitive advantage achieved by a company basically influences its profitability and market position. The article shows that in addition to this the evaluation has many other criteria, and the management must consider these when defining competitive adavantage. The study explains that as a result of the acceleration of technological and economic development, the globalization of economic processes, and the evaluation of networks of interdepedence, the management have to face new types of competitive advantage. To choose between these the management has to consider competitive vulnerability. Following this the article attempts to summarize the basic law of the theory of competitive advantage, before introducing the most important management techniques for the selection of competitive advantage. Finally, the study emphasizes that the key factor in  achieving a competitive edge and the success of different management techniques is the CEO, and through the model of the "CEO's personality pyramid" it explains the requirements that the manager has to meet.

  Journal of Economic Literature (JEL) classification: O30, O32

• The Development of Growth Accounting Techniques in the Mirror of Economic Growth

  85-103

  Levente Nadasi

  Views:

  151

  In this article we present the development of certain growth theories that model the main sources of growth. Since the elasticity of substitution – one of the most important parameters of production function – is not unity, as the Cobb-Douglas production function assumes, it can be different from a value of 1; hence we need a more general CES-type (Constant Elasticity of Substitution) production function. Another important question is the classification of factors of production. The elasticity of substitution is an efficiency factor as well, thus it receives special attention in the analysis. Finally we summarize the main papers that are mainly concerned with growth accounting, and try to answer the question of which factors play a significant or less significant role in economic growth. Growth accounting is strongly connected to growth theories so we refer back to growth theory at certain points.

  JEL classification: E13, O47

• The “Timeless and Highly Topical at the Same Time”: In Memory of Professor András Bródy

  5-17

  Zsuzsa Bekker

  Views:

  135

  Professor András (Andrew) Bródy, one of the most outstanding of post-war Hungarian economists, perhaps the most spirited member of his generation, died at the age of 86, on 3rd of December, 2010. For several decades he had been dealing with the mathematical formulation of Marxian theory. He was an internationally respected model-builder, applying input-output analysis, also working with Professor Leontief in this field. He was both in full command of high-level theoretical knowledge, and proficient in the latest methodological approaches. He also conducted pioneering research into the application of
  the laws of thermodynamics to economic problems. His international fame was initially based on his book Prices and Proportions, published in Hungarian (1969) and also in English by North-Holland (1970). Several articles, conference papers, and several other books he wrote or edited broadened this recognition,
  the most important landmarks being Ciklus és szabályozás (Cycles and Regulation, 1980) in Hungarian, Slowdown (1982) in both English and Hungarian, and finally, Near Equilibrium in English (2004) and Chinese (2009). Fortunately, he participated in the work of our department, the History of Economic Thought at the Corvinus University of Budapest between 1995 and 2005. This article in his honour is a brief summary of his achievements and a reader’s selection of his writings prepared for the students of our department which reflect his views on the state of economic theories; also attached is a bibliography of his most important publications.

  JEL classification: A11, B23, B24, B32

• Intraindustrial trade in the light of theoretical explanations and empirical investigations

  78-104

  Laszlo Erdey

  Views:

  175

  The Heckscher-Ohlin (HO) model regarde as a modern theory of trade, dominant for more than a quarter of a century had to face more and more challenges in the second half of the 20th century. It seemed that the 2*2*2 (product-factor-country) model, which assumed perfect competition, constant return to scale and homgeneous products and whose elegance was rooted in its simplicity, could not offer appropriate answers for the explanation of empirical facts in two significant areas. The conclusion of the model, namely that countries will have a comparatvie advantage in the productions of goods for which they use factors of production relatively abundant in the country, was first questioned by the Leontief paradox and later by the empirical facts of intraindustrial trade. The study focuses on this latter phenomenon. In the first part it presents and classifies the major theoretical models of the phenomenon, and in the second it discusses, on the basis of empirical surveys in this field, the most important factors influencing intraindustrial trade.

• The role of culture in economic growth: an assessment, criticism and paths for future research

  22-44

  Judit Kapás

  Views:

  222

  There is an abundance of empirical literature on the impact of culture on economic development. This literature has been developing at the margin of growth theory and institutional economics. This paper reviews this branch of the literature by structuring it into three main lines, and placing an emphasis on (self)-criticism directed towards it, as well. The author provides some proposals for further steps towards improving the culturegrowth empirical literature, following the two routes identified by the (self)-criticism.

  Journal of Economic Literature (JEL) codes: O43, Z19

• Regional factors affecting the rushed and balanced growth of territorial capital

  62-80

  György Jóna

  Views:

  165

  Adapting the precepts of Kornai’s rushed economic growth theory, this paper compares the harmonic and rushed growth of territorial capital in the Hungarian sub-regions between 2004 and 2010. In the empirical analysis, the article applies the methodology of the concept of territorial capital. The empirical results indicate that the causes of the rushed growth of territorial capital can be found in underdeveloped infrastructural capital and the simultaneous development of socioeconomic inequalities. The effects of the rushed growth of territorial capital could be controlled and eliminated by adequately integrating tools of regional development, economic development and public policy.
  

  Journal of Economic Literature (JEL) kódok: C62, C68, Q01, R58

• Economic Freedom and the Process of Economic Growth: An Empirical Analysis Based on a New Measure

  5-30

  Judit Kapás

  Pál Czeglédi

  Views:

  335

  This paper, relying on a conceptualization of economic freedom in terms of kinds of government actions, develops a new measure of economic freedom. However, this is not art for art’s sake; instead, it allows us to provide an explanation for how particular institutions of economic freedom enhance economic development, a view upon which scholars agree. We develop two concepts related to economic freedom, namely the freedom-compatible and freedom-non-compatible institutions and use them as tools in an analysis of the process of economic growth, especially the relationship between economic freedom and long-run income. The major argument is that freedom-compatible institutions are primary determinants of income, while freedom-non-compatible institutions depend upon them and are partly the outcomes of the growth process itself, a fact which is explained by the Misesian theory of interventionism. Our regression analyses support our theoretical insights.

  JEL Classification: B53, H10, O10

• Political budget cycles: fiscal cycle effects in state expenditures in Poland

  47-62

  Agnes Halasz

  Views:

  130

  In this paper we aim to investigate what kind of role fiscal cycles played in the development of the state budget balances in Poland between 1989 and 2011. Overall, the results of the latest research have found that political budget cycles (PBC) are more typical in less developed countries with a shorter period of experience with democratic institutions, such as the post-socialist transition economies. Nevertheless, empirical studies point out that this phenomenon has been disappearing over time as voters learn how democratic institutions and political manipulation operate. However, this theory could not be proved by testing the pattern of Poland, neither in the case of budget balances nor for state expenditures. Despite the fact that some fiscal cycle effects were found in public sector wages and pensions in the election period of 1997 and 2001, these proved to be temporary, and simultaneously some other measures were identified that counterbalanced the effects of pork barrel spending. Overall, the cyclical evolution of the budget balances in Poland, particularly in the nineties, was not a result of political budget cycles.

  Journal of Economic Literature (JEL) classifications: D72, E62, H3