• 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...

Introduction

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.

Middle

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.

Conclusion

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. Identify the types of policy available to a government that aims to promote economic ...

    fraction of output, it has the same shape as the production function. The steady state investment per worker line and the saving per capita must intersect, because sq = (n + d) k, the point of intersection is A. When capital - labor ratio is KA, output per capita is QA, which means that saving is enough for capital widening.

  2. Accounting report managment accounting

    The final master budget is taken to the chief executive. There are different cash flows that might be used for a business, they are the sales budget, the production budget etc. The problems of using the budgets are: * Budgetary slack * Incremental budgeting * Lack of involvement and motivation

  1. Wal-Mart Stores Inc. international exchange exposure.

    These funds are recognized as a reduction of cost of sales at the time the incentive target is earned.

  2. Current Account Deficit.

    Any rich open market country which runs a large current account deficit is probably doing something that cannot be sustained because it is unlikely that such a country has lots of unexploited new investment opportunities and so it has to pay for this deficit by selling its land or its companies or by going deeper into debt.

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

    However, it does not mean that Drakensberg can neglect the cost factor. When its new product passes from introduction stage to growth, cost reduction will be the principal task. ii. Leading product development This strategy requires the company to invent innovated product that can lead whole market.

  2. Payback Periods.

    and the project should be accepted; if it is negative, the project should be rejected.

  1. The inequalities of a class society do not end with economic inequality: indeed, economics ...

    The women's words of repudiation of their social positioning is extremely charged with meaning. There is no appertaining of identity, and this source of 'classlessness' forms the vulnerability of class and its association. There is a sense that negation of class signifies a 'sensitive, subtle and minute indicator' of the importance of class to these women,' (Sayer, 2002, 1.3).

  2. Microsoft Audit Planning - 8 Steps

    Make inquiries of appropriate client personnel - make inquiries of how often the performance reviews are carried out to segregation of duties to discover if policies and procedures allow the carrying out of management objectives. 2. Examine documents, records, and reports- examine the documents to make sure that they are

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