Channels of Monetary Policy in a Transition Country: Hungary

Fernando Barran and Chantal Kegels
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Fernando Barran: UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES); Central Bank of Uruguay
Chantal Kegels: UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)

No 1996016, LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

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.

Keywords: Transition; monetary policy; crowding-out effect; Hungary (search for similar items in EconPapers)
Pages: 25
Date: 1996-06-01
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvir:1996016

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