• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Analyse the debt of Hungary in the 1990's. Use economic theory to explain the relationship of debt with the macroeconomic aims and indicators.

Extracts from this document...


Name: Aleksandra Hertelendi Course: B.A. (Hons) in European Business Administration 1st year, 2nd semester Unit title: Foundation to Economics Seminar Group: C Seminar Tutor: dr. G�sp�r Tam�s Assignment deadline: 7. April 1999 Title: Analyse the debt of Hungary in the 1990's. Use economic theory to explain the relationship of debt with the macroeconomic aims and indicators In this assignment I would like to state first what government debt is and how does it affect the economy. We would like to analyse the debt of Hungary in the 1990's from 1990 to 1997, with the help of data collected by the K�zponti Statisztikai Hivatal (Central Statistical Office), and the reports provided by the Hungarian Ministry of Finance1. At the end we would also like show what implication debt had on macroeconomic aims and indicators of Hungary. Just before starting we would like to define what macroeconomic aims and indicators are. The main macroeconomic indicators of a country are the GDP, the current balance of payment, the inflation rate, the rate of unemployment, the amount of debt etc. The macroeconomic aims, goals of a country are high and stable economic growth (steady growth in real GDP), low unemployment, low inflation, and the avoidance of balance of payment deficits and excessive exchange rate. ...read more.


5Which is again a contradiction to one of the macroeconomic aims of an economy that is high and stable economic growth . Having known all these we can look at how the deficit and debt formed in the period 1990-1997. The analysis of debt in the 1990's For analysing the debt in Hungary in the 1990's we would like to use Tables 1, and 2 in the Appendix.6 . In Table 1 we can see the percentage change from year to year of GDP, which reflects the economic growth of the country, it also shows the unemployment rate, the current account balance, the amount of foreign debt. Table 2 shows the current account balance and external debt as a percentage of GDP. These all will be needed for the analysis and to draw conclusion how debt has affected the macroeconomic aims and indicators. We would also like to use Diagrams 1-4,6. Two main periods can be distinguished in all 4 diagrams. The first period between 1990-1994, and the second period between 1995-1997. From 1991, we can see a rapid economic growth (there was a need to change the whole economic system), and this economic growth had commenced alongside decline of inflation, resulted in a dramatic increase of imports and a rapid increase of indebtedness of the state and the country. ...read more.


There were good steps toward reducing unemployment, but the unemployment rate is still too big and something should be done about the black labour force market as well as there are many people working unregistered, that is they have incomes without paying taxes. It is very good that the exchange rate between the dollar and Hungarian Forint is not fluctuating, that is it is stable. The deficit of the budget is still too big. It would be essential to reduce this to the extent so that no primary deficit would be achieved so as to stop the increase of internal debt. If the internal debt is too big there will be inflation again which is not good for the economic development of the country. To the extent of economic policy definitely retains the requirement of improving competitiveness and the of preserving equilibrium for the following years. It will be possible for the economic development of Hungary and her economic policy to get over the decades' old dilemmas of "balance or growth" and "stimulation or restriction" and a balance keeping economic growth based on the improvement of competitiveness may gradually accelerate. This would be very essential to achieve as Hungary wishes to be part of the European Union soon, which may also arise new economic problems, and in the meantime better solutions for the country. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our University Degree Accounting section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related University Degree Accounting essays

  1. Horizontal effect of directives: A missed opportunity.

    The limits which Community law imposes are that those conditions must not be less favourable than those relating to similar domestic claims and must not be so framed as to make it virtually impossible or excessively difficult to obtain reparation.

  2. Beyond Expected Utility Theory.

    Rubinstein (1998) notes that bounded rationality could possible explain (at least partly) for ambiguity aversion (evidence in the Ellsberg Paradox (Mukerji at al. 2002)(agents preferring certain outcomes to lotteries for which the exact probabilities are unknown), preference reversal, inability to optimise and framing effects.

  1. Drakensberg Limited Case Report. The main problems are whether to launch a new product ...

    In this case, the optimal output (i.e. to maximize the total contribution) before production of Dankieisis first analyzed. Considering the maximum available amount of raw materials, skilled labor and machine hours, the utilization rate is calculated if all the demand is satisfied.

  2. Problems in Entrepreneurial Business Finance Reasons for ...

    * Prompt clearance of the proposals with minimum processing time and without cumbersome paper work. * Assistance in preparing the proposals and completion of document formalities. * Market oriented interest rates and service charges with liberal terms of margin, level of assistance and repayment schedules.

  1. Inflation in Hungary.

    followed by rapid growth of oil prices (c) the collapse of Eastern European Trade The stabilisation policy contained the clamp down of budgetary and monetary policy and two serious devaluation of the Forint. The implements of the monetary policy were the adjusting of the inland credits, and decreasing the real credits for the industrial sector, although the demand for money has grown since 1989.

  2. Two-page report if an aggressive takeover should occur on BHP Billiton Ltd

    51.0 24.2 23.6 35.8 36.4 48.7 57.1 75.5 109.7 99.6 Balance Sheet Summary Cash 2,532.0 2,654.0 2,325.4 2,639.0 1,856.8 1,044.0 2,282.3 4,401.6 13,351.0 14,614.6 Total Current Assets 11,275 9,786 7,985 9,659 10,242 11,807 13,064 22,399 27,713 29,490 PP&E 67,401 53,051 51,007 52,527 61,218 65,142 66,587 71,864 94,098 65,207 Intangables Ex.

  1. Two-page report if an aggressive takeover should occur on Fortescue Metals Group Ltd (FMG)

    Appendices Appendix A: Executive Summary The purpose of the report is to determine if it is feasible to have an aggressive takeover of Fortsecue Metal Group (FMG). Annual reports and financial statements were used for analysis.

  2. Microsoft Audit Planning - 8 Steps

    We also need to be aware of the possible & pending lawsuits in order to give a proper opinion when performing audit. ISA 550 defined ?related parties? given in (International Accounting Standard)[13] says: Parties are considered to be related if one party has the ability to control the other party

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work