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Channels of Monetary Policy in a Transition Country: Hungary

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Author Info

  • Barran, Fernando

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES); Central Bank of Uruguay)

  • Kegels, Chantal

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

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    Abstract

    In the last years, Hungary recorded huge current deficits. These results may endanger the capacity of repayment of the outstanding debt and thus its access to international financial markets. We analyze how domestic credit market conditions have affected the current account performance. Implementing Granger-causality tests on time series data over the period 1990-1994, we find that current account performance was negatively affected by credit contraction. Furthermore, using desegregated data on credit, we are able to show that credit to small enterprises is highly significant to explain current account performance as well as the level of unemployment.

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    File URL: http://sites.uclouvain.be/econ/DP/IRES/9616.pdf
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    Bibliographic Info

    Paper provided by Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) in its series Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) with number 1996016.

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    Length: 25
    Date of creation: 01 Jun 1996
    Date of revision:
    Handle: RePEc:ctl:louvir:1996016

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    Web page: http://www.uclouvain.be/ires
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    Related research

    Keywords: Transition; monetary policy; crowding-out effect; Hungary;

    References

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