Experiences of European crisis management: the reform of economic policy coordination

This article is intended to present the new, (re)forming elements of economic policy coordination, an instrument playing a central role in the EU. One important lesson drawn from the crisis is that in order for the EU to become a stable, dynamically growing economy – in addition to its internal market (in particular, the free movement of capital) and a single monetary policy – there is a need for efficient coordination, which should also be credible for the markets. Economic policy coordination – the alignment of national fiscal policies to one another and, for euro area Member States, to the common monetary policy – is a key issue, and the intention to reform it is closely related to the crisis management of the past two years. The proposals presented thus far indicate that EU policy makers are firmly committed to setting up economic policy coordination mechanisms which are far more efficient than those already in place. Accordingly, they will rigorously assess both fiscal and real economic imbalances, and after the imbalances have been identified, they will readily enforce corrective mechanisms, including sanctions more severe than those already in place. Rules governing crisis management will certainly be clearer; however, in order to minimise moral hazard, the common European rescue package will continue to have a hefty price tag. It is a warning sign, however, that despite firm policy intentions, markets remain rather sceptical about the reform of the fiscal framework and the ability to guarantee the sustainability of fiscal policies, as indicated by the sovereign credit risk premia, which by September had risen to the levels observed in May.EU institutions, policy coordination, crisis management

Fast credit growth: equilibrium convergence or risky indebtedness?

This article is of relevance from an economic policy point of view – it attempts to answer a question of current economic relevance raised in many member states of the European Union. Is the fast credit growth witnessed in recent years part of an equilibrium process or rather an excessive rise in lending involving risks? The analysis prepared by the MNB suggests that in the new EU member states, the macroeconomic trends explain in great depth the rapid growth in lending witnessed since the transition to a market economy. It is important to note, however, that there are signs of excessive growth in lending in the region, particularly in the Baltic states. Stability risks may arise in Hungary in relation to the increase in household lending experienced in recent years.financial deepening, credit growth, transition economies, panel econometrics, endogeneity bias

Controlling Mackey--Glass chaos

The Mackey--Glass equation, which was proposed to illustrate nonlinear phenomena in physiological control systems, is a classical example of a simple looking time delay system with very complicated behavior. Here we use a novel approach for chaos control: we prove that with well chosen control parameters, all solutions of the system can be forced into a domain where the feedback is monotone, and by the powerful theory of delay differential equations with monotone feedback we can guarantee that the system is not chaotic any more. We show that this domain decomposition method is applicable with the most common control terms. Furthermore, we propose an other chaos control scheme based on state dependent delays.Comment: accepted in Chaos: An Interdisciplinary Journal of Nonlinear Scienc

On spectral synthesis in varieties containing the solutions of inhomogeneous linear functional equations

As a continuation of our previous work \cite{KV2} the aim of the recent paper is to investigate the solutions of special inhomogeneous linear functional equations by using spectral synthesis in translation invariant closed linear subspaces of additive/multiadditive functions containing the restrictions of the solutions to finitely generated fields. The idea is based on the fundamental work of M. Laczkovich and G. Kiss \cite{KL}. Using spectral analysis in some related varieties we can prove the existence of special solutions (automorphisms) of the functional equation but the spectral synthesis allows us to describe the entire space of solutions on a large class of finitely generated fields. It is spanned by the so-called exponential monomials which can be given in terms of automorphisms of \cc and differential operators. We apply the general theory to some inhomogeneous problems motivated by quadrature rules of approximate integration \cite{KKSZ08}, see also \cite{KKSZ} and \cite{KKSZW}

On spectral analysis in varieties containing the solutions of inhomogeneous linear functional equations

The aim of the paper is to investigate the solutions of special inhomogeneous linear functional equations by using spectral analysis in a translation invariant closed linear subspace of additive/multiadditive functions containing the restrictions of the solutions to finitely generated fields. The application of spectral analysis in some related varieties is a new and important trend in the theory of functional equations; especially they have successful applications in case of homogeneous linear functional equations. The foundation of the theory can be found in M. Laczkovich and G. Kiss \cite{KL}, see also G. Kiss and A. Varga \cite{KV}. We are going to adopt the main theoretical tools to solve some inhomogeneous problems due to T. Szostok \cite{KKSZ08}, see also \cite{KKSZ} and \cite{KKSZW}. They are motivated by quadrature rules of approximate integration

The Role of the Housing Market in Monetary Transmission

As part of the monetary transmission studies of the Magyar Nemzeti Bank, this paper attempts to analyse the role of the housing market in the monetary transmission mechanism of Hungary. The housing market can influence monetary transmission through three channels, namely, the nature of the interest burden of mortgage loans, asset (house) prices, and the credit channel. The study first summarises the experiences of developed countries, paying special attention to issues arising from the monetary union. It then examines the developments in the Hungarian housing and mortgage markets in the last 15 years, as well as the expected developments and changes attendant to the adoption of the euro. Using panel econometric techniques, the study investigates the link between macroeconomic variables and house prices in Hungary, and the effect of monetary policy on housing investment and consumption through the wealth effect and house equity withdrawal.Housing, Monetary transmission, Mortgage market, Panel econometrics

The Role of the Housing Market in Monetary Transmission

As part of the monetary transmission studies of the Magyar Nemzeti Bank, this paper attempts to analyse the role of the housing market in the monetary transmission mechanism of Hungary. The housing market can influence monetary transmission through three channels, namely, the nature of the interest burden of mortgage loans, asset (house) prices, and the credit channel. The study first summarises the experiences of developed countries, paying special attention to issues arising from the monetary union. It then examines the developments in the Hungarian housing and mortgage markets in the last 15 years, as well as the expected developments and changes attendant to the adoption of the euro. Using panel econometric techniques, the study investigates the link between macroeconomic variables and house prices in Hungary, and the effect of monetary policy on housing investment and consumption through the wealth effect and house equity withdrawal.Housing, Monetary transmission, Mortgage market, Panel econometrics.