IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Chronic Moderate Inflation in Transition: The Tale of Hungary

  • Janos Vincze

In this study I examine two aspects of Hungarian inflation. with some reference to other CEFE. The first is the political economy dimension, the second the mechanics of price making Concerning the former topic I argue that the balance of payment or mercantilistic motive has been the single most important determinant of Hungarian macroeconomic policy. With respect to the second I elaborate on two (interrelated) issues: I make the claim that the nominal exchange rate is in fact a nominal anchor to inflation in a certain sense, and I try to clarify the role of relative price changes. The outcome of the Investigation has important consequences on disinflation policies. The political economy thesis implies that without reducing foreign debt to comfortable levels disinflation will be awkward in either a fixed or a flexible exchange rate regime. To achieve price stability, at least initially, targeting the nominal exchange rate seems to be the most viable alternative, though this should be done in a manner different from the current system of preanounced crawling bands. Relative price developments should be taken into account when numerical parameters are rendered to the policy.

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://www.wdi.umich.edu/files/Publications/WorkingPapers/wp176.pdf
Download Restriction: no

Paper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number 176.

as
in new window

Length: pages
Date of creation: 01 Jun 1998
Date of revision:
Handle: RePEc:wdi:papers:1998-176
Contact details of provider: Postal: 724 E. University Ave, Wyly Hall 1st Flr, Ann Arbor MI 48109
Phone: 734 763-5020
Fax: 734 763-5850
Web page: http://www.wdi.umich.edu
Email:


More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

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

When requesting a correction, please mention this item's handle: RePEc:wdi:papers:1998-176. 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: (Laurie Gendron)

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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.