EFFECTS OF DEVALUATION IN A MACROECONOMETRIC MODEL FOR HUNGARY

EFFECTS OF DEVALUATION IN A MACROECONOMETRIC MODEL FOR HUNGARY

It is widely believed that the exchange rate does not have an effect on foreign trade quantities in Hungary. In this paper¹ it is shown that, taking into account the taxes and subsidies linked to foreign trade variables, there is significant correlation between the exchange rate that is modified by...

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Veröffentlicht in:Acta oeconomica 1989-01, Vol.41 (3/4), p.293-311
1. Verfasser: HALPERN, L.
Format: Artikel
Sprache:eng
Schlagworte:
Debt
Devaluation
Export subsidies
Exports
Foreign exchange rates
Hungary
Import prices
Imports
International trade
Investment subsidies
Macroeconomics
Tariffs
Tax subsidies
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Zusammenfassung:It is widely believed that the exchange rate does not have an effect on foreign trade quantities in Hungary. In this paper¹ it is shown that, taking into account the taxes and subsidies linked to foreign trade variables, there is significant correlation between the exchange rate that is modified by these taxes and subsidies and trade volumes. When put into an econometric macromodel the effect of this relation is weakened considerably. The dynamic behaviour of central import control— i. e. the negative feedback between the import and the lagged foreign debts— is responsible for the neutralization of the exchange rate effect.
ISSN:0001-6373
1588-2659