Capital Flows in a Transitional Economy and the Sterilization Dilemma: The Hungarian Experience, 1992-97

Journal of Policy Reform

Posted: 7 May 1999

See all articles by Pierre L. Siklos

Pierre L. Siklos

Wilfrid Laurier University - School of Business & Economics; Balsillie school of international affairs ; Australian National University (ANU) - Centre for Applied Macroeconomic Analysis (CAMA)

Multiple version iconThere are 2 versions of this paper

Abstract

Transitional economies adopted different exchange rates at the beginning of the transition to a market economy and Hungary, in particular, went through a number of changes in this area. In particular, Hungary can be said to have targeted the real exchange rate and, given recent interest in the experience of South American countries which have followed this policy, the experience of a transitional economy should also be of interest. The paper examines the success of Hungary's central bank at sterilizing capital inflows during the period 1992-97. The empirical evidence presented suggests that only during the second half of 1995 did the National Bank of Hungary begin to fully sterilize inflows of capital to neutralize their impact on domestic credit. More descriptive and anecdotal evidence further substantiates this finding. Prior to March 1995, conflicting monetary and fiscal policy objectives prevented the successful targeting of the real exchange rate.

Note: This is a description of the paper and is not the actual abstract.

JEL Classification: E58, F32

Suggested Citation

Siklos, Pierre L., Capital Flows in a Transitional Economy and the Sterilization Dilemma: The Hungarian Experience, 1992-97. Journal of Policy Reform, Available at SSRN: https://ssrn.com/abstract=158297

Pierre L. Siklos (Contact Author)

Wilfrid Laurier University - School of Business & Economics ( email )

Department of Economics
75 University Avenue W.
Waterloo, Ontario N2L 3C5
Canada
519-884-0710 Ext.. 3491 (Phone)

HOME PAGE: http://pierrelsiklos.com

Balsillie school of international affairs ( email )

67 Erb Street West
Waterloo, ON N2L 6C2
Canada

Australian National University (ANU) - Centre for Applied Macroeconomic Analysis (CAMA) ( email )

Do you have negative results from your research you’d like to share?

Paper statistics

Abstract Views
577
PlumX Metrics