The aim of this paper is to model the interaction between the loan market and real activity, while financial frictions are explicitly taken into account. The econometric methodology used is VECM. Johansen's approach is employed to allow for multiple cointegration. Financial frictions are...

The paper investigates the impact of foreign currency lending in the Hungarian corporate sector on real investment. Using a rich micro dataset we consider two questions. First we test whether foreign currency (FX) lending – by lowering user cost and easing liquidity constraints – contributed...

The study analyses the relationship between real economy convergence and the convergence of relative prices. Similar to its peers in the CEE region, a significant part of Hungary's price convergence with developed Western European countries can be attributed to the convergence of the real...