Suchergebnisse

This paper assesses the effect of monetary policy on major components of aggregate demand. We use three different macromodels, all estimated on Hungarian data of the past 10 years. All three models indicated that after an unexpected monetary policy tightening investments decrease quickly. The response of consumption is more ambiguous, but it is most likely to increase for several years, which may be explained by the slow adjustment of nominal wages. On the other hand, we could not detect any significant change in net exports during the first couple of years after the shock. The weak response of net exports can be due to the fact that the drop in exports is coupled with a fall in imports of almost the same magnitude, highlighting the relative importance of the income-absorption effect, as opposed to the expenditure-switching effect.

In this study we examine the impact on Hungary of a possible correction of global imbalances. We distinguished four different channels of the global adjustment process, which are widely referred to in the literature (fiscal tightening in the U.S.; housing price correction in the US; an increase in the risk premium of dollar assets; increase in domestic demand in the Asian region) and analyzed them through model simulations. We constructed global scenarios using the NIGEM model, while we captured the domestic impacts using the Quarterly Projection Model (NEM) of the Magyar Nemzeti Bank. According to our results, both the global and domestic effects differ significantly with respect to whether the correction originates from the U.S. or Asia and whether it is a result of policy or market processes. We found that a possible global correction will pass through to Hungary mainly through the Eurozone countries, thus its main impact will be relatively dampened. The responses of domestic macroeconomic variables depend on our assumptions on the reaction of monetary policy and the developments in the risk premium on forint denominated assets.

In this paper we investigate the possible effects of fiscal tightening in Hungary from two perspectives. First, simulations in an estimated neo-Keynesian model are used to characterise the effects of different scenarios for fiscal consolidations. We show that the composition of fiscal shocks is important for both the economic outcome and monetary policy. These simulations suggest a modest output cost of fiscal consolidation. Then we take a closer look at the non-Keynesian effects and their relevance for Hungary in a qualitative way. In our review of non-Keynesian channels of fiscal adjustments we conclude that expansionary effects are likely to become evident only in the medium or long run, rather than immediately after measures are taken.