The aim of this study is to provide an overview of the main characteristics of expectations of professional forecasters, households and firms in respect of Hungarian inflation trends. In countries where an inflation targeting regime is in place, inflation expectations are of key importance from...

In the 2000s, after the introduction of inflation targeting, most monetary transmission channels were weak in Hungary, making monetary policy less effective. Inflation expectations were unanchored and fiscal policy was unsustainable. Households and the government built up high debt levels mainly...

The aim of this paper is to present new empirical evidence on the characteristics of service trader firms using a novel dataset for Hungary. In the period of slowing growth of goods trade, services, which are more resilient to cycles and are growing steadily since the crisis, might open new...

Although in modern monetary economics it is usually assumed that inflation expectations play a prominent role when economic agents set prices and wages, the empirical evidence for this link is scarce. This paper aims to identify the effect of changes in inflation expectations on prices and wages...

We show that in both time-dependent and state-dependent sticky price models, prices of sticky price products (i.e. whose price changes rarely) contain more information about medium term inflation developments than those of flexible price products (i.e. whose price changes frequently). We do this...

Exchange rate movements influence prices through numerous channels. In this paper we provide empirical evidence on pass-through of exchange rate movements into consumer prices. The pass-through depends on a number of factors, and its size may vary over time. In recent years, prices have...

This paper studies the consumption response to an increase in the domestic value of foreign currency household debt during a large depreciation. We use detailed consumption survey data that follows households for four years around Hungary's 2008 currency crisis. We find that, relative to similar...

Global trade has been exceptionally weak over the past four years. While global trade grew at approximately twice the rate of GDP prior to the Great Recession, the ratio of global trade to GDP growth has declined to about unity since 2012. This paper assesses to what extent the change in the...

How do households adjust to a large debt shock? This paper studies household responses to a revaluation of foreign currency household debt during a large depreciation in Hungary. Relative to similar local currency debtors, foreign currency debtors reduce consumption expenditures approximately...