Financial Programming and Policy: The Case of Hungary
Edited by Karen A. Swiderski
IMF Institute
International Monetary Fund
August 1992
©1992 International Monetary Fund
Library of Congress Cataloging-in-Publication Data
Financial programming and polic0y: the case of Hungary/edited by Karen Swiderski
p. cm.
ISBN 9781557753045
1. Finance—Hungary. 2. Hungary—Economic policy—1989- 3. Hungary—Economic conditions—1989- A. Swiderski, Karen, 1955-.
HG186.H8F56 1992
92-20734
CIP
338.9439—dc20
Price: $17.50
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Cable: Interfund
Contents
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Preface
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Chapter I. Overview of Macroeconomic Developments in Hungary: 1968–89
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Background
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The 1970s
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The 1980s
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Final Remarks
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Chapter II. Interrelations Among Macroeconomic Accounts
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Introduction
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Common Features of Macroeconomic Statistics
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National Income and Product Accounts and the Balance of Payments
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Monetary Accounts and the Other Macroeconomic Accounts
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Fiscal Accounts and the Other Macroeconomic Accounts
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Financial Transactions: The Flow of Funds
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Exercises and Issues for Discussion
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Chapter III. Introduction to Financial Programming
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Nature of Financial Programming
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A Basic Financial Programming Framework
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Policy Content of Programs
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Steps in Economic Forecasting
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Issues for Discussion
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Chapter IV. Prices, Output, and Expenditure
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Prices
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Output
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Composition of Expenditure
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Exercises and Issues for Discussion
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Chapter V. Balance of Payments
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Introduction
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Forecasting the Balance of Payments
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Forecasting External Debt
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Exercises and Issues for Discussion
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Chapter VI. Fiscal Sector
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The Role of Government and Fiscal Reform in an Economy in Transition
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Forecasting Government Transactions
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Exercises and Issues for Discussion
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Chapter VII. Monetary Sector
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Institutional and Recent Monetary Developments in Hungary
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Forecasting the Monetary Survey
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Forecasting the Accounts of the Monetary Authorities
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Exercises and Issues for Discussion
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Preface
Case studies of selected countries have traditionally played an important role in the financial programming courses offered by the IMF Institute. The basic aim of these courses has been to familiarize participants with the issues that arise in formulating a consistent set of macroeconomic policies. Against the background of a rapidly changing situation in Eastern Europe and in the republics of the former Soviet Union, the present case study of Hungary was developed to better address the specific needs of countries in transition from centrally-planned to market economies.
The period covered extends through 1990. Since then, Hungary’s political and economic situation has undergone marked changes, an account of which can be found in various issues of the National Bank of Hungary’s Quarterly Review. The data used in the study have generally been taken from official sources but, in a few instances, the presentation has been modified for expositional purposes. In addition, it has not been possible to include revisions to official data that have been made since the completion of the study.
The various chapters of the study are designed to provide the basic material needed to develop consistent projections of macroeconomic developments in Hungary for 1990, and their implications for the medium-term. The workshop series guides participants in the development of a so-called reference scenario, based on an assumption of unchanged policies. The reference scenario serves as a benchmark for developing a normative program scenario, which participants are expected to elaborate in the final weeks of the course. Program scenarios are explicitly based on hypothetical policy packages designed to achieve a desired set of objectives. Comparison of the reference and program scenarios should provide an indication of the impact of the policy measures adopted.
Karen Swiderski, Deputy Chief of the English Division, served as coordinator and editor of the volume. Jeffrey Davis, Chief of the English Division, was responsible for overall supervision of the project. In addition to contributing to the text, Janos Somogyi, Deputy Chief of the External Training Division, put the data base together. Other contributors included Angel L. Antonaya, Leyla U. Ecevit, William L. Hemphill, John Karlik and Jukka Paljarvi, all of the English Division.
The authors gratefully acknowledge comments received from colleagues in the European I Department and the IMF Institute. Any opinions expressed are those of the authors and do not reflect the views of the Hungarian authorities, Executive Directors of the IMF, or IMF staff. The authors bear sole responsibility for any errors.