Exchange Rate Regime and Disinflation in the Transition: The Experience of the Pre-Announced Crawling Peg in Hungary

Revue d'Economie Financiere, Vol. 2, No. 69, 2001

Posted: 28 Aug 2002

See all articles by Balázs Égert

Balázs Égert

Organization for Economic Co-Operation and Development (OECD); CESifo (Center for Economic Studies and Ifo Institute); Université Paris X Nanterre - Department of Economics; William Davidson Institute

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Abstract

The aim of the paper is to analyse the disinflationary process in Hungary which took place in the second half of the 1990s. After the implementation of the so-called "Bokros" austerity package in early 1995, a crawling peg exchange rate regime has been adopted by the Hungarian authorities. We try to shed light on the role this exchange rate system played in disinflation. We also study the credibility of the system and investigate the presence of the Balassa-Samuelson effect. Finally, the Central bank's interventions on the forex market are studied.

Keywords: Hungary, Disinflation, Balassa-Samuelson effect, Sterilisation, Exchange rate regime

JEL Classification: F36, O11, P20

Suggested Citation

Egert, Balazs, Exchange Rate Regime and Disinflation in the Transition: The Experience of the Pre-Announced Crawling Peg in Hungary. Revue d'Economie Financiere, Vol. 2, No. 69, 2001, Available at SSRN: https://ssrn.com/abstract=320500

Balazs Egert (Contact Author)

Organization for Economic Co-Operation and Development (OECD) ( email )

2 rue Andre Pascal
Paris Cedex 16, 75775
France

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Université Paris X Nanterre - Department of Economics

Nanterre Cedex, 92001
France

William Davidson Institute

724 E. University Ave.
Wyly Hall
Ann Arbor, MI 48109-1234
United States

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