At the end of 2014, more than 23% of the foreign currency denominated mortgage portfolio in Hungary was overdue; about 20% was classified as non-performing and the tendency is worsening. In this paper, we propose a solution to effectively reduce the credit and systemic risk inherent to this portfolio – the proposed model can be applied to other mortgage portfolios in trouble as well. The main element of our proposal is income-contingent repayment complemented with effective incentives to motivate debtors to repay their debt. We demonstrate that the proposed scheme is attractive for both the debtors and the lenders; therefore, contrary to some recent policy measures, in this case there is no need for direct state intervention to force modifications to the existing legal contracts. In order to evaluate the possible effects, we simulated a realistic population of borrowers with different age, debt, loan-to-value, and income. Then we calculated the expected income paths, the repayments of the borrowers as well as the profit of the lenders on the basis of the non-performing FX mortgage portfolio. The results underpin that the proposed scheme creates significant value added and, most importantly, that it can effectively reduce the vulnerability of the entire economy to future shocks.
The term paradigm was introduced to the philosophy of science by Thomas Kuhn — he used this term to denote the specific approach applied by a school of reasearch to examine its subject matter. Researchers using the same paradigm seek answers to similar questions, and employ similar methods and concepts. In an article published in 2000, the author of this essay introduced the term system paradigm, which focuses on the systems functioning in a society. This study develops the theoretical considerations outlined in that earlier article on the basis of experience on post-socialist transition. The first part compares the socialist and capitalist systems, describing their main characteristics, and concludes that the capitalist system has become established in former socialist countries, except for North Korea and Cuba. The second part analyzes varieties of capitalism within a typology which classifies prevailing forms of politics and government. Three markedly different types are identified: democracy, autocracy, and dictatorship. Huntington wrote about the “third wave” of democratization. This study concludes the third wave has dried up: for the 47 post-socialist countries, only a tenth of the population live in democracy, while autocracy or dictatorship prevails in all other countries in this group. The third part of this essay applies the conceptual and analytical apparatus to Hungary, where capitalism exists, and autocracy is the prevailing politico-governmental form — here we can find important characteristics common to other capitalist countries or other autocracies. This finding is compatible with the observation that there are some, less fundamental, characteristics unique to Hungary, or “Hungarica”, which differ from the characteristics of all other countries.
Authors:Karolina Lewandowska-Gwarda and Elżbieta Antczak
Bajat , B. – Krunić , N. – Kilibarda , M. – Samardžić-Petrovicć , M. ( 2011 ): Spatial Modelling of Population Concentration Using Geographically Weighted Regression Method . Journal of the Geographical Institute , Jovan Cvijić, SASA 61 ( 3
Authors:Tatiana Blinova, Vladimir Markov, and Viktor Rusanovskiy
and Empirical Explanations . Journal of Economic Surveys , 17 ( 5 ): 709 – 748 .
Federal State Statistics Service ( 2013 ): Number of Population of the Russian Federation by Cities, Towns and Districts. Statistical Bulletin
their characteristics. In such a triple division, the Third World was characterised by low output and living standards, by a large population and a quick growth thereof. Even back then, one already had to wonder to which world China belonged. Certainly