Banks, firms, bad debts and bankruptcies in Hungary, 1991-1994
In the early nineties the stock of bad debts suddenly increased in the Hungarian banking system. Relying on empirical data the authors argue that this was not a consequence of the "flow problem", that is, of the continuation of wrong crediting prectices. It was rather caused by the dynamics of the "stock problem", the banks had, namely, inherited many bad debts and bad clients from the former system. This is why the changes in regulation introduced in early 1992 in order to improve the payment discipline - deemed-to be bad - had been a false step. The new laws on banking and bankruptcy also aggrevated the cash flow problems of banks, but they caused serious damage mainly in the enterprise sphere, because they disrupted the relations between buyers and sellers. Finally, the state started projects to recapitalize the banks and to save the most important firms, but these turned out to be poorly devised and bureaucratic actions, which rather prompted those concerned to lobbying than to carrying out the reorganization programmes.
Agriculture in a market economy
The operation of agricultural markets is interfered with in almost every country of the world. The theoretical foundation of agricultural interventions is rooted in the particular market failures of the agrarian sector: disparity of incomes, instability and the suboptimal level of agricultural researches. The study analyses to what extent these particular market failures support the justification of government intervention. The income disparity does not support government intervention from either theoretical or practical viewpoints. Instability may only be accepted as a justification if its sources are the imperfect forward markets, the missing or incomplete conditions of markets, or the intermediaries on the market. Empirical investigations have not yet given an unambigous answers to the question to what extent these imperfections of the market contribute to the emergence of instability. A great part of agricultural researches may not be considered as a common good, because they do not satisfy the condition of nonexclusivity. Thus, the theoretical arguments for the support of agriculture are mostly unfounded.
Incentive effects of social security programs: a survey
A crucial issue of social security reforms is the incentive effects such reforms produce. And as far as discussions about social security reforms are concerned the crucial issue is methodology. In the light of this double consideration, the author addresses the most important views and - to a somewhat larger extent - surveys the methods of empirical research done on the subject. For reasons of size constraints, only a few institutions are examined here, such as oldage pension, unemployment benefit and disability pension. The same selective approach holds for the incentive effects, too, among which only the impact on labor supply and saving are covered.
Seigniorage, budget deficit, aggregate demand
The article is a critical view of the concept of monetary seigniorage and the distribution of seigniorage between the government, the central bank, and private agents. The author presents the fiscal seigniorage by developing an analytical framework and concludes that inflation tax is imposed not only on money holders but on financial institutions as well. Because of this there is a significant gap between credit and deposit interest rates, adversely influencing both savings and investments. As there is a doubledigit inflation rate and a large public debt in Hungary, the nominal budget deficit is a misleading indicator of fiscal impacts on aggregate demand, and thus the operational deficit should be used to asses the economic effects of fiscal policy. The degree of monetization and the compositon of public debt do not affect the interest outlays of the government if market rates are paid on central bank credits. However, the gradual securitization of the Central Bank's stock of foreign exchange losses will raise the budget deficit and its propotion to GDP without exerting any additonal pressure on aggregate demand.
Government policy towards small and mediumsize firms in Japan
The sphere of small and mediumsize firms is a determinant factor of the production structure that became established in Japan in the course of history. A balanced development of the country's economy is inconceivable without an active policy, regulated on high level, towards these firms. The legal background has always to be accompanied by a system of instruments and institutions devised for this purpose, as well as by programme packages conforming with the economic policy of the government. A study of the economic environment perhaps most advantageous for the development of small and medium entrepreneurs may raise ideas in connection with the Hungarian adaptation of some elements of the system.