Advanced Search
MyIDEAS: Login to save this article or follow this journal

Consequences of global imbalance corrections for Hungary

Contents:

Author Info

  • Zoltán M. Jakab

    ()
    (Magyar Nemzeti Bank (central bank of Hungary))

Abstract

There are numerous signs of the emergence of global imbalances in world economy. This is reflected by the fact that of the developed countries the USA is producing a substantial, historically unprecedented magnitude of current account deficit vis-a-vis the current account surplus of a well-defined group of mainly emerging countries and of some developed countries. This is probably not an optimal situation, and in the course of solving this problem there is the question of what impacts the Hungarian economy may be exposed to and what steps Hungarian monetary policy can take. In examining the various scenarios of global adjustment, it is important to distinguish between an adjustment originating in Asia or in the USA. The former stimulates the Hungarian economy, while the latter temporarily hinders the Hungarian economy. A correction triggered by the markets has stronger output consequences for the Hungarian economy, than that of a restrictive fiscal policy in the USA. Hungarian monetary policy has an effect on whether output or inflation will become more volatile. Hungarian monetary policy tracking the ECB involves higher fluctuations in inflation and lower changes in GDP, whereas the situation is just the opposite in case of independent policies. If the exchange rate of the forint weakens due to a decline in global risk appetite, this would initially result in growing inflation, although over the longer term even lower GDP and inflation cannot be ruled out either.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://english.mnb.hu/Root/Dokumentumtar/ENMNB/Kiadvanyok/mnben_mnbszemle/mnben_MNB_Bulletin_December_2006/mnbsz_200612_jakab_en.pdf
Download Restriction: no

Bibliographic Info

Article provided by Magyar Nemzeti Bank (the central bank of Hungary) in its journal MNB Bulletin.

Volume (Year): 1 (2006)
Issue (Month): 2 (December)
Pages: 27-34

as in new window
Handle: RePEc:mnb:bullet:v:1:y:2006:i:2:p:27-34

Contact details of provider:
Web page: http://www.mnb.hu/
More information through EDIRC

Related research

Keywords: global imbalance; current account adjustment; forcasting; simulation.;

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Blanchard, Olivier & Giavazzi, Francesco & Sa, Filipa, 2005. "The US Current Account and the Dollar," CEPR Discussion Papers 4888, C.E.P.R. Discussion Papers.
  2. Gourinchas, Pierre-Olivier & Rey, Hélène, 2005. "International Financial Adjustment," CEPR Discussion Papers 4923, C.E.P.R. Discussion Papers.
  3. Philip R. Lane & G Milesi-Feretti, 2004. "Financial Globalization and Exchange Rates," CEP Discussion Papers dp0662, Centre for Economic Performance, LSE.
  4. Eichengreen, Barry, 2006. "Global imbalances: The new economy, the dark matter, the savvy investor, and the standard analysis," Journal of Policy Modeling, Elsevier, vol. 28(6), pages 645-652, September.
  5. Hamid Faruqee & Douglas Laxton & Dirk Muir & Paolo A. Pesenti, 2007. "Smooth Landing or Crash? Model-Based Scenarios of Global Current Account Rebalancing," NBER Chapters, in: G7 Current Account Imbalances: Sustainability and Adjustment, pages 377-456 National Bureau of Economic Research, Inc.
  6. Caroline L. Freund, 2000. "Current account adjustment in industrialized countries," International Finance Discussion Papers 692, Board of Governors of the Federal Reserve System (U.S.).
  7. Philip R. Lane & Gian Maria Milesi-Ferretti, 2004. "Financial globalization and exchange rates," LSE Research Online Documents on Economics 19926, London School of Economics and Political Science, LSE Library.
  8. Kenneth Rogoff & William Brainard & George Perry, . "Global Current Account Imbalances and Exchange Rate Adjustments," Working Paper 33687, Harvard University OpenScholar.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:mnb:bullet:v:1:y:2006:i:2:p:27-34. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Maja Bajcsy).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.