The seminar will be held in Visitor Centre at 10:30 am.
Diuscussant: M Zoltán Jakab
Abstract
This paper attempts to aggregate and summarize fresh results concerning the monetary transmission mechanism in Hungary. Within a research project at the MNB nine studies have been published investigating the channels through which Hungarian monetary policy affects the economy. We create a framework for synthesizing particular results based on Mishkin’s (1996) classification. We analyze how demand and supply are affected through those channels. Our conclusion is that during the past ten years monetary policy did exert measurable influence on real activity and prices. The dominance of the exchange rate channel explains why price respond faster and output responds milder than in closed developed economies like the US or the eurozone. We expect that after adopting the euro the absence of exchange rate will be compensated by the fact that the interest rate channel will work through foreign demand as well, therefore no significant asymmetries can be expected inside the eurozone in terms of monetary transmission.