Capital Flows in a Transitional Economy and the Sterilization Dilemma: The Hungarian Experience, 1992-97
27 Pages Posted: 4 May 1999
There are 2 versions of this paper
Capital Flows in a Transitional Economy and the Sterilization Dilemma: The Hungarian Experience, 1992-97
Capital Flows in a Transitional Economy and the Sterilization Dilemma: The Hungarian Experience, 1992-97
Date Written: December 1998
Abstract
This paper evaluates Hungary's dilemma with sterilization in the context of the record of countries that have experienced similar capital inflow episodes, e.g., Latin America and Asia. The study focuses on the short-run impact of sterilization on monetary policy. The empirical results indicate that sterilized interventions by the National Bank of Hungary (NBH) did not neutralize capital flows until possibly the middle of 1995, following a change in government and, more significantly, a change in exchange rate regimes. Indeed, it appears that monetary policy was overly restrictive and that, for a time, the NBH overcompensated for the inflows of capital.
JEL Classification: E58, F32
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
What Has Driven Chinese Monetary Policy Since 1990? Investigating the People's Bank's Policy Rule
-
Capital Mobility and the Scope for Sterilization: Mexico in the 1970s
By Robert E. Cumby and Maurice Obstfeld
-
Capital Flows in a Transitional Economy and the Sterilization Dilemma: The Hungarian Case
-
Capital Flows in Central and Eastern Europe: Evidence and Policy Options
By Ratna Sahay and Carlos A. Vegh
-
China as a Reserve Sink: The Evidence from Offset and Sterilization Coefficients
-
Privatizing a Banking System: A Case Study of Hungary
By Istvan Abel and Pierre L. Siklos
-
Observations on the Transmission of Business Fluctuations: The Case of Latin America 1972-1989
-
The Fiscal Effects of Monetary Policy
By Momi Dahan