Preannounced crawlling peg regime in Hungary
The preannounced crawling peg regime occupies a central place in the corrective policy package introduced by the Hungarian authorities in March 1995. The main goals of the new exchange rate regime are: restoration and maintenance of external competitiveness, cooling inflation expectations and ensuring the credibility of macroeconomic policy. The present parameters of the regime (initial step devaluation, rate of crawl, intervention band), as well as developments in the spot and forward foreign exchange and government securities markets, indicate that the crawling peg had a successful start in Hungary. The experience of other countries (Southern Corea, Portugal, Israel, Poland) suggests that the future success of the crawling peg is closely dependent on the implementation of fiscal restraint and wage discipline. In addition, in the near term, it is essential to follow a prudent interest rate policy, that is, without risking capital outflows. Another lesson form outside experience is that the authorities should avoid an additional step devaluation, an increase in the rate of crawl, or a widening of the band, before the credibility of the new regime has been firmly established.
Crisis spiral, or: a possible interpretation of the loss of capital of die Hungarian banks
The Hungarian banking system lost its capital between 1987 and 1993. Earlier investigations suggest that for an explanation of this fact it is insufficient to explore the characteristics of mismanagement in the banks, the analyses have to be extended to outside the banking system. The adaptation of the socalled Fisher spiral - recently used for the analysis of the Great Depression - allows a possible approach to the loss of capital. It also raises a number of questions the answer to which brings us nearer to an understanding of the present situation of the Hungarian monetary system and its future possibilities. Those formulated in the study do not mean the end of research, but rather outline its initial hypotheses. The study suggests that in the relationship between the monetary and the real sectors it is not so much the monetary but the credit channel that plays the main role - and this is the case in Hungary, too.
Financial development, inflation and economic growth (Three dynamic optimization models)
The study analyses the interrelations between financial development, inflation and economic growth in an endogeneous growth model. The model interprets the financial sector as one influencing both the demand for money and capital productivity. The analysis shows that financial liberalization has a positive impact on economic growth, but its measure depends on the real rate of interest before liberalization and the rate of inflation. Besides, according to one version of the model, inflation has a strong negative impact on growth. This result differs from that of the endogeneous growth models hitherto known, according to which inflation has but a minimal impact on growth, but it is consistent with that of empirical analyses.
The economy of mental infatuation
The sects increasingly spreading throughout the world - thus also in Hungary - have lately become objects of research not only of sociologists or theologists, but have also attracted the attention of economists. At the first glance the fact is hardly compatible with the assumption of a rationally acting homo oeconomicus that the microcommunities demanding great sacrifices, selfabnegation and denial, often even elciting social excommunication, are frequently highly successful and the number of their members is fast growing in spite of the general secularization trends. The inexorability, and mental infatuation characteristic of some of these sects is only seemingly irrational. In fact, the high costs of admittance and sacrifices serve the strainin gaway of stowaways. Faith is, namely, a public good the supply of which would be insugcient - similarly to other public goods - if the religious community were weakened by stowaways. The sects not only take away from their members, but also offer them something: salvation goods in a wider sense of the word. In the author's interpretation this notion comprises much more than common faith and transcendental experience. The salvation goods do satisfy very earthly needs. At the end of the article the author touches on the growth and equilibrium problems of these special religious groups. The choice by others exercises a positive external impact on those joining the sect, thus the more people choose such a community, all the more likely it is that many more will choose it in the future. At the same time, the growth of the sects increases the chance for the appearance of stowaways and this state of affairs calls for new sects, for new movements. These may give sense and meaning to the world for those who cannot find these in themselves and in their primary communities.
Hypotheses about the factors determining supply, demand, the current account balance of payments and the acceleration of inflation
The article surveys some important questions of the theory of money. It makes efforts at analysing the problems of saving, investment, income creation, demand, the balance of payments, acceleration of inflation and indebtedness with the aid of simple models. The author reaches the conclusion that almost each of these questions can be given a satisfactory answer without any resort to the theory of money. Later the author passes from the analysis of shortterm growth problems to the investigation of longterm affairs. He indicates that it is with the aid of the pair of notions of innovation - coalition that we can make progess in this field. With this the author strives to throw a bridge across his statements in the September 1989 issue of this periodical, inquiring into the more general problems of economic growth and the now reviewed theses of monetary theory.
Environmental hazards of enterprises and the responsibility of managers
There can be no doubt that the greatest challenge for humanity in the next century will be the problems of the environment. The social order of values changes, but it is uncertain whether the managers of the now developing market economies will be - using the terms of Kenneth Boulding - cowboys who, considering the world to be an open one, think that in the interest of enrichment every resource should be conquered and used, or aeronauts who know that the Earth is finite and thus make efforts in the economy at reycling the wastes. In the West it was partly the social debates evolving in the wake of environmental catastrophies that forced the solution, and society made managers responsible, also under criminal law, for the environmental problems. In the most developed Western countries the managers defend themselves through overinsurance against the environmental challenge, while Eastern and Central Europe are characterized by uncertainty also in this respect. According to the hypothesis of the authors it is expedient to develop the environmental management securing adequate security for the firms by setting out from the environmental hazards of the enterprise. A wrong environmental management can ruin a firm in the same way as a wrong financial management can. In addition, it is possible that wrong decisions entail greater social risk. The authors formulated their hypothesis by mostly relying on the experiences of the multinational firms, but for practical proof serve the empirical data of a Hungarian survey through questionnaire. Beside those inerested in the topic, the article is recommended first of all to managers.