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Exchange Rate Regime and Disinflation in the Transition: the Experience of the Pre-announced Crawling Peg in Hungary

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  • Balàzs Égert

Abstract

[fre] Régime de change et désinflation dans la transition : l’expérience du système de parité à crémaillère pré-annoncée en Hongrie . En dépit du fait que la Hongrie n’ait pas opté pour une thérapie de choc au début des années 1990 afin de transformer son économie planifiée en économie de marché, le processus de transition dit gradualiste a provoqué un choc économique et social brutal. Afin de prévenir la crise, le gouvernement a lancé un vaste programme de stabilisation de caractère hétérodoxe comportant : la dévaluation exceptionnelle de 9 % du forint hongrois par rapport au panier de devises en vigueur, l’instauration d’un système de parité à crémaillère avec annonce préalable, la surtaxe à l’importation de 8 % de caractère temporaire, la stricte modération des salaires, la diminution radicale des dépenses publiques et un large éventail de mesures structurelles. Cet article tente ainsi d’analyser la transition hongroise en examinant la stratégie de désinflation, la politique de change et de taux d’intérêt de ce pays. . Classification JEL : F31, P20 [eng] Despite the fact that Hungary did not opt for a shock therapy at the beginning of the 1990s to turn its planned economy into a market economy, the so-called gradualist transition gave rise to a brutal economic and social shock. In order to prevent the crisis, the government launched a massive, heterodox stabilisation programme. It consisted of the following measures : an exceptional devaluation of the Hungarian forint by 9% against the currency basket, the introduction of a pre-announced crawling peg system, which replaced a fixed exchange rate regime with discretionary adjustment, a temporary 8 per cent import surcharge, a strict wage control, a sharp reduction of public expenditure and a broad range of structural measures. This article presents the Hungarian transition examining the disinflation, monetary and interest rate policy in this country. . JEL classifications : F31, P20

Suggested Citation

  • Balàzs Égert, 2001. "Exchange Rate Regime and Disinflation in the Transition: the Experience of the Pre-announced Crawling Peg in Hungary," Revue d'Économie Financière, Programme National Persée, vol. 6(1), pages 361-379.
    • Handle: RePEc:prs:recofi:ecofi_1767-4603_2001_hos_6_1_4567
    DOI: 10.3406/ecofi.2001.4567
    Note: DOI:10.3406/ecofi.2001.4567
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    References listed on IDEAS

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    1. Szapary, Gyorgy & Jakab, Zoltan M., 1998. "Exchange Rate Policy in Transition Economies: The Case of Hungary," Journal of Comparative Economics, Elsevier, vol. 26(4), pages 691-717, December.
    2. Wladimir Andreff & François Bourguignon, 1994. "Quand la stabilisation dure... L'hypothèse d'une inflation inertielle en Europe centrale et orientale," Revue Économique, Programme National Persée, vol. 45(3), pages 819-832.
    3. Bela Balassa, 1964. "The Purchasing-Power Parity Doctrine: A Reappraisal," Journal of Political Economy, University of Chicago Press, vol. 72(6), pages 584-584.
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    More about this item

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • P20 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - General
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • P20 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - General

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