Agricultural Trade Between Central Europe and the EU

International Relations/Trade,

Some impacts of the EU accession on the new member states’ agriculture

The main aim of the paper is to analyse the impact of the EU accession on the New Member States’ agriculture with special regard to production, employment, farmers’ income and intra-EU trade in agricultural goods on the basis of the latest statistical data of Eurostat. According to our findings, accession has provided incentives to agricultural production and to utilize natural endowments (mainly agricultural land); however, agricultural employment decrease could not be halted. Nevertheless, the economic situation of the farmers improved due to increasing incomes. Though the enlarged EU provided markets for the NMS agricultural products, the competition on their domestic markets increased significantly, resulting in massive import penetration. Consequently, most of the NMS agricultural trade balance deteriorated considerably. Concerning future prospects, it highly depends on the reformulation of the Common Agricultural Policy, the new budget of the EU and the domestic economic and agricultural situation of the NMS.EU accession, NMS agriculture, farmers’ income, intra-EU agricultural trade

Optimal Rate of Inflation in Hungary

This paper, requested by the Monetary Council, attempts to determine the level of inflation consistent with price stability, taking into account the characteristics of the Hungarian economy. Price stability is defined as the level of inflation that allows the maximisation of social welfare on a 15-20 year horizon, which corresponds to the first phase of real convergence. In other words, this study aims to determine the inflation rate that can be considered optimal within the given time horizon. In developed countries, the primary objective of central banks is the maintenance of price stability, in view of the welfare costs of inflation. Price stability is usually taken to mean a low, but non-zero, inflation rate. A positive inflation rate can be justified since very low inflation rates, in the proximity of zero, have been found to reduce long-term welfare. The negative welfare effect of zero inflation can be explained in terms of the following: asymmetric nominal rigidities, the risk of deflation, the necessity of positive nominal interest rates, and the statistical measurement bias in the CPI. These factors were examined in light of the catching-up status of Hungary, focusing, in particular, on the question of whether or not, due to its catching-up status, the optimum rate of inflation in Hungary is higher than the 1-2,5% inflation rate defined in developed countries. The findings of the study suggest that the inflation rate corresponding to price stability in Hungary is higher than the inflation target of the European Central Bank. Our calculations suggest that, in the long run, inflation in the range of 2,3-3,2% can safeguard against the costs of deflation. This level can compensate for the distortions in the CPI and allow for real price adjustments, even if Hungarian tradable prices move together with those of its trading partners and assuming downward price rigidity.optimal inflation rate, price stability, costs of inflation.

Válság és világkereskedelem : Kilábal-e a válságból a világkereskedelem?

A reálgazdasághoz hasonlóan a világkereskedelem is csak lassan lábal ki a válságból. Jelentős visszahúzó erő a gyenge amerikai gazdaság, Japán lassú növekedése, az európai stagnálás/recesszió, az euróövezet válsága, az adósságválság, a magas munkanélküliség, a restriktív monetáris és a megszorító gazdaságpolitikai intézkedések, valamint a külföldi közvetlen beruházások forgalmának dinamizmusvesztése. A világgazdaságot továbbra is a pénzügyi egyensúlytalanságok jellemzik. A világ áru- és szolgáltatáskereskedelmének motorja a fejlődő régió, s azon belül is Kína és India marad, még akkor is, ha a kínai gazdaság alacsonyabb fokozatba kapcsol és modellt vált. Sok az előre nem látható gazdasági, politikai, természeti tényező. A nyerstermékek (különösen az olaj) ára továbbra is volatilis lesz. Jó hír ugyanakkor, hogy a globalizáció jelenlegi szintjén a nemzetgazdaságok érdeke a nyílt protekcionizmus elkerülése és a multilateralizmus erősítése

Some impacts of the EU accession on the new member states’ agriculture

The main aim of the paper is to analyse the impact of the EU accession on the New Member States’ agriculture with special regard to production, employment, farmers’ income and intra-EU trade in agricultural goods on the basis of the latest statistical data of Eurostat. According to our findings, accession has provided incentives to agricultural production and to utilize natural endowments (mainly agricultural land); however, agricultural employment decrease could not be halted. Nevertheless, the economic situation of the farmers improved due to increasing incomes. Though the enlarged EU provided markets for the NMS agricultural products, the competition on their domestic markets increased significantly, resulting in massive import penetration. Consequently, most of the NMS agricultural trade balance deteriorated considerably. Concerning future prospects, it highly depends on the reformulation of the Common Agricultural Policy, the new budget of the EU and the domestic economic and agricultural situation of the NMS

Tax evasion and tax changes in Hungary

Tax evasion reduces the efficiency of the economy as unequal opportunities of tax evasion leads to an inefficient distribution of resources. In Hungary, based on data for 2005–2006, tax evasion resulted in a transfer of 7.9 per cent of GDP from taxpayers to tax evaders. Following measures aimed to reduce tax evasion, this transfer was estimated to be 6.7 per cent of GDP in 2006 and 2007. Underlying reasons for tax evasion are the different burdens on labour and capital incomes. According to international experience, either the control of splitting labour and capital incomes or bringing their contribution burdens closer to one another can help in this situation. The effect of administrative measures is often temporary, because they do not improve tax-compliance attitude. A positive change in taxpayers’ attitude is an especially difficult task; one of its possible means can be a shift in the tax burden in favour of local taxes.taxation, tax evasion, hidden economy.