Amonetary union is classified by several authors as an extreme form of fixed exchange rate arrangement. Analyzing exits from monetary unions is, however, demanding. This paper studies the impact of inflation and interest rate differentials on the nominal exchange rate after leaving a form of peg arrangement and moving to a floating regime, as it may serve as a parallel for a monetary union break-up. The theoretical framework is provided by the theory of the International Fisher Effect. We find that countries with rigid exchange rate policy, less frequently adjusted central parity and narrow exchange rate bands experienced sharp depreciation after the shift, but the depreciation was only temporary. In this group of countries the exchange rate adjustment is weakly exogenous to inflation and interest rate differentials. We apply Johansen’s approach to cointegration, based on the estimation of the Vector Error Correction Model, and the Johansen constraint test of exogeneity. There is strong evidence that long-term depreciation could not be expected in a former euro area country after its possible break-up and that inflation and interest rate would not be the driving forces of exchange rate behavior. Finally, parallels between the local currency adoption within a euro area member state and the leaving of the peg arrangement are pointed out.
This paper addresses the experiences and challenges of Hungary’s monetary policy during the period 1995–2000 and in view of the progress toward EU and EMU membership. The structure of relative prices changed markedly in the past and is expected to continue to change in the future. The reason, in addition to a possible Balassa–Samuelson effect, was the elimination of subsidies and introduction of turnover taxes in the past, and a future convergence toward a price structure prevalent in the EU. In the 1995–2000 period, the resulting gap between CPI and PPI led to massive foreign capital inflows. While the policy of sterilised interventions by the National Bank of Hungary was probably the right answer, it was inevitably costly, and was made costlier than necessary by the way it was carried out. Continued adjustments in the price structure in the future will confront monetary policy with the same dilemmas and, resulting in an inflation floor, will complicate the country’s conditions of joining EMU within a reasonable time frame after EU accession.
The euro crisis and its lessons are still not a closed chapter for economists and policy makers. The challenge to find the most appropriate ways to prevent intra-area imbalances is still on the top of the agenda. Nominal adjustment (internal devaluation) remains one of the most critical aspects of this debate. Many are indeed interested in whether austerity measures in several countries “made sense.” But much more is at stake here than evaluating the past. The true question is whether the eurozone can rely on nominal adjustment to align internal economic fluctuations. This paper contributes to the answer by investigating the size of price changes and their impacts on output and trade in the wake of the euro crisis. Selecting the most appropriate variables to measure competitive outcomes, the basic idea of “expansionary contraction” is tested. We rely on a comprehensive panel of all Eurozone member states in the post-crisis years (2010–2017). The results suggest that flexible price levels cannot be taken for granted, and a link to competitiveness is not self-evident, either. Other channels of adjustment may prove to be more important, but scaling them up will ultimately require a sound consensus on the future architecture of the euro.
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.
In the early and mid-2000s, the prospect of EU accession and the global boom facilitated rapid economic recovery and boosted economic and institutional reforms in the Western Balkan region. The global financial crisis of 2007–2009 and the European crisis of 2010–2013 slowed the pace of economic growth and amplified high unemployment in the region. In addition, various unresolved legacies from past conflicts slowed the pace of reform and progress towards EU accession.
The European Commission’s February 2018 communication sets an indicative deadline (2025) for the two most advanced candidates – Serbia’s and Montenegro’s admission to the EU. This could incentivise all Western Balkan countries, including those candidates that have not yet started membership negotiations (Macedonia and Albania) and those waiting for candidate status (Bosnia and Herzegovina and Kosovo), to remove domestic political obstacles to EU accession, solve conflicts with neighbours, speed up reforms and accelerate economic growth.
The isotopomers of L-tryptophan (L-Trp) labeled with hydrogen isotopes in the indole ring were obtained by isotope exchange
method. Heavy and tritiated water were used as the sources of stable and radioactive label. Three isotopomers, i.e., [4′-2H]-L-Trp, [4′-3H]-L-Trp, and doubly labeled [4′-2H/3H]-L-Trp were synthesized by isotope exchange enhanced by irradiation with a mercury discharge lamp. The indole whole ring
labeled isotopomers, i.e., [2′,4′,5′,6′,7′-2H5]-L-, [2′,4′,5′,6′,7′-3H5]-L-, and doubly labeled [2′,4′,5′,6′,7′-2H/3H]-L-Trp were synthesized by isotope exchange between L-Trp and D2O or DTO in the presence of deuteriated trifluoroacetic acid.
Giorno , C. – Richardson , P. – Roseveare , D. – van den Noord , P. ( 1995 ): Estimating Potential Output, Output Gaps