Myths and maths: Macroeconomic effects of fiscal adjustments in Hungary

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: MNB Occasional Papers ; No. 52

Classification and Topics

• Classification: Wirtschaft ; General Aggregative Models: Forecasting and Simulation: Models and Applications ; Monetary Policy ; Policy Objectives; Policy Designs and Consistency; Policy Coordination ; Fiscal Policy ; Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy ; Studies of Particular Policy Episodes ; Fiscal Policies and Behavior of Economic Agents: General
• Subject: Keynesian ; non-Keynesian effects ; expansionary fiscal adjustment ; Monetary policy reactions ; Model simulations ; Haushaltskonsolidierung ; Wirkungsanalyse ; Schock ; Geldpolitik ; Keynesianismus ; Ungarn

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Horváth, Ágnes ; Jakab, Zoltán M. ; Kiss, Gábor P. ; Párkányi, Balázs
• Event: Veröffentlichung
• (who): Magyar Nemzeti Bank
• (where): Budapest
• (when): 2006

Further information

• Handle: http://hdl.handle.net/10419/83532
• Last update: 10.03.2025, 11:42 AM CET