Cyclically adjusted budget balance (CAB) is a widely cited and widely used concept in the evaluation of fiscal situations. The key idea behind it involves the identification of potential levels of economic variables. There are two recently used methods: the aggregate approach and the...

Over the past decade, increasing public debt has become one of the most important problems for the Hungarian economy, significantly constraining the room for manoeuvre for fiscal policy and in some periods even calling into question its sustainability. As a percentage of GDP, gross public debt...

If compliance with a fiscal rule in certain periods requires procyclical fiscal policy, it means that fiscal policy does not mitigate the cyclical fluctuations of the economy, but rather may amplify them, i.e. it is unable to perform its stabilisation function. On the basis of the analysis of...

Our study aims to compare the level of redistribution, and expenditure structure of the Visegrád countries in the period between 1995–2010. For the purpose of comparability, the new methodology presented in the study filters out those components of total expenditures, which are exogenous in...

Our study presents the top-down stress testing framework currently used by the Magyar Nemzeti Bank. We run separate solvency and liquidity stress tests to analyse the ability of the banking system to absorb shocks and we present their results in our Report on Financial Stability. In the former,...

This paper focuses on analyzing the cash supply network, in which the central bank – as an institutional member – acts as a key influencing node/party. By analyzing the case study example of the Hungarian cash supply, the paper introduces the different kinds of special network patterns that...

In this study, a system-wide financial stress index (SWFSI) for the Hungarian financial system is developed. The indicator measures the joint stress level of the Hungarian financial system’s main segments: the spot foreign exchange market, the foreign exchange swap market, the secondary market...

MNB has received daily, transaction-level data on key Hungarian interest rate derivatives markets since the beginning of 2009 with the launching of the K14 report. The dataset that has accumulated since early 2009 provides an opportunity to better comprehend the structure and functioning of...

In this paper we apply the Early Warning System methodology to ten Central and Eastern European Countries to find useful sets of indicators which could predict macroeconomic and financial imbalances. We argue that finding such indicators is crucial in the current monetary policy framework...