La politique du taux de change en Hongrie, 1972-1976

Exchange Rate Policy hi Hungary, 1972-1976. This paper argues that additional revaluation of the forint in 1973-74, over and above that which was actually implemented, could have helped to stabilise the domestic price level. This policy would also have reduced the need for intervention in the form of the grossly excessive and specific export taxes and import subsidies actually used, without significantly worsening the balance of trade deficit. The exchange rate in Hungary's version of a "modified centrally planned economy" during this period was not a suitable policy instrument for seeking balance of trade equilibrium, because the relevant elasticities were small, and the balance of trade was fundamentally a function of macroeconomic policy, i.e. of the relation between domestic output and absorption (in particular, investment). The appropriate role for the exchange rate was therefore to help maintain domestic price stability in the face of world inflation

Balance (ability · Balance of trade · Commercial policy · Current account · Economics · Exchange rate · Inflation (cosmology · International economics · Intervention (counseling · Investment (military · Market economy · Monetary economics · Monetary policy · Political science · Politics · Price of stability · Subsidy · Post-Communist Economic and Political Transition