Publications of Horváth, J.
Agent based model of a simple economy
This article proposes a model of a simple economy based on a set of agent-based modeling principles. The model is based on the “trust game” formulated by Berg et al. (Games Econ Behav 10:122–142, 1995), and anticipates a random matching of partners taking in to account adaptive agent behavior. Simulation in the NetLogo programming environment, using profile distributions obtained from empirical studies, has shown the most successful agents to posses low parameters of trust in the role of Sender and high parameters of trustworthiness in the role of Receiver.
National Identity and Money: Czech and Slovak Lands 1918-2008
An expanding literature on money and identity is built around the assumption that political elites deliberately use currency design to foster national identities. However, the empirical evidence in favor of this assumption has been fragmentary. Drawing on detailed primary sources we demonstrate nationalist intentions of political elites involved in currency design. We also examine how political elites use banknotes as official pronouncements on who is and who is not part of the nation and what the official attitude toward foreigners is. By tracing changes in the inclusive and exclusive messages directed at an intra-state or international audience we document that there is no connection between ingroup (national) love and outgroup (foreigners, minorities, opposition) hate. The amount of exclusive messages to outgroups culminated in conditions of perceived threat when political leaders tried to mobilize pre-existing identities to secure or maintain political power. In contrast, the officials deliberately tried to broaden ingroup boundaries in order to build international communities. Finally, we document that in the case of limited support for the new conception of identity, officials tried to depict the old and the new identity as complementary, embedding the new identity in existing discourses.
The border effect in small open economies
Abstract: This paper examines the importance of the national border in relative price variability in two neighboring, small open economies. Using monthly frequency price data of narrowly defined, homogenous consumer products, it finds that the time-series variation in within-country relative prices is about the same in the two countries. After controlling for distance, relative price variation is significantly higher across than within countries. The border is the dominant determinant of relative prices, even after accounting for nominal exchange rate variability and local culture as represented by language spoken. Our estimates of the border effect are largely immune to the bias identified in Gorodnichenko and Tesar [Gorodnichenko, Y., Tesar, L., 2006. Border effect or country effect? Seattle is 110miles from Vancouver after all. Unpublished manuscript]. Copyright 2008 ElsevierCopyright of Economic Systems is the property of Elsevier Science Publishing Company, Inc. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)
Trade balance and income shocks: experience of transition economies
This paper investigates the major sources of changes in the trade balance of four Central European and three Baltic transition economies with an emphasis on the difference between permanent and transitory disturbances to income. In all seven countries the findings support the hypothesis that transitory disturbances to income are the main determinants of changes in the trade balance. These results seem to be fairly consistent with inter-temporal models of trade balance, which view transitory shocks to income as the main source of variations in the trade balance. These results do not seem to support the view that productivity shocks alone generate most of the variation in the trade balance.
Relative price variability in two small open economies
Proceeding of International Conference on Development Organized by the Moscow School of Economics, APril 2007
Návrat politickej ekonómie: ekonomická teória a politické problémy
Return of Political Economy: Economic Theory and Political Problems
International currency arrangements and policies
This book deals with exchange rate arrangements and exchange rate policies. Chapter 2 classifies exchange rates into flexible, intermediate and rigid arrangements. The book is subdivided into an arrangement of free float, managed float, pegged but adjustable, target zone, crawling peg, hard peg, currency board, dollarisation, and monetary union. This chapter also discusses hypothesis of vanishing intermediate exchange rate arrangements as well as it deals with differentiation between de jure, and de facto exchange rate arrangements. Chapter 3 deals with the issue of choosing an appropriate exchange rate arrangement. The book briefly characterises basic approaches of how to choose an exchange rate regime. Furthermore, the book reviews considerations stemming from the optimum currency area literature. Chapter 4 deals with problems of exchange rate, which were encountered by the most developed transition countries. After discussing the initial stabilisation problems of the early 1990s, it provides a general overview of the macroeconomic situation and exchange rates arrangements in these countries in the period 1990-2004. Also the book discusses issues connected with the future introduction of the euro into these countries. Chapter 5 provides the reader with two case studies. First, a discussion of the Czech experience in the transition period till the crisis in May 1997 is presented. Second, a discussion of the Hungarian experience concerning banking and exchange rate policy in the 1990s till the early years of this century. Finally, Chapter 6 discusses different historical periods from the viewpoint of currency arrangements.
Growth experience and prospects of Central and Eastern European countries: a synthesis
Prepared for the World Bank GDN Global Research Project on Explaining Growth, August 2005.
Supply and demand shocks in accession countries to the Economic and Monetary Union
The success of the enlarged Economic and Monetary Union (EMU) depends on the relative incidence of demand and supply shocks in both the participating and the accession countries. This paper addresses the issue using bivariate vector autoregression models for current and would-be EMU member countries. While the degree of symmetry in business cycle shocks among EMU accession countries is significant, idiosyncratic shocks between current and would-be member states dominate. Our results suggest a costly process of adjustment following EMU enlargement. (C) 2004 Association for Comparative Economic Studies. Published by Elsevier Inc. All rights reserved.
Shocks and monetary integration efforts. An empirical assessment of Slovakia
Proceedings from the Conference on the Anniversary of the 115th birthday of RobertSchuman in Bratislava, December 4-5, 2001
Rewriting the Rules: An Interview with Ivan Mikloš on Slovakia’s Economic Reform
Review of the book: Rewriting the Rules: An Interview with Ivan Mikloš on Slovakia’s Economic Reform (Hr´ıb, S., Žitˇnanský, R. (Eds.), Kalligram Publishing House, Bratislava, 2001, 127 pp.)
Optimal exchange rate and monetary policy when joining the (European) monetary union
Proceedings of the Conference held in Bratislava on September 13-14, 2001,
Small economies' adjustment to global tendencies
Reviews the book: Small economies' adjustment to global tendencies
EU enlargement and its macroeconomic effects in Eastern Europe
Reviews the book: "EU enlargement and its macroeconomic effects in Eastern Europe. Currencies, prices. Ivestment and competitiveness"
The Political Economy of Protest and Patience. East European and Latin American Transformations Compared
Reviews the book: 'The Political Economy of Protest and Patience. East European and Latin American Transformations Compared,' by Bela Greskovits
Stability of monetary unions: lessons from the break-up of Czechoslovakia
In 1993, Czechoslovakia experienced a two-step breakup. On January 1, the country disintegrated as a political union, while preserving an economic and monetary union. Then, the Czech–Slovak monetary union collapsed on February 8. This paper analyzes the economic background of the two breakups from the perspective of the optimum currency area literature. The main finding is that the Czech and Slovak economies were vulnerable to asymmetric economic shocks, such as those induced by the economic transition. In particular, the stability of Czechoslovakia was undermined by the low correlation of permanent output shocks, low labor mobility, and higher concentration of heavy and military industries in Slovakia. J. Comp. Econom., December 1999, 27(4), pp. 753–781. Center for European Integration Studies (ZEI), University of Bonn, Walter-Flex-Strasse 3, 53113 Bonn, Germany, and Center for Economic Research, Tilburg University, Netherlands; Academia Istropolitana Nova, Bratislava, Slovakia, Central European University, Nador u. 9, 1051 Budapest, Hungary, and Center for European Integration Studies (ZEI), University of Bonn, Bonn, Germany; Institute for Advanced Studies (IHS), Stumpergasse 56, 1060 Vienna, Austria.
The May 1997 currency crisis in the Czech Republic
This article discusses some issues related to the Czech currency crisis in May 1997. First, it evaluates the role of different factors which were linked with the crisis. These include the role of monetary and fiscal policy, current account deficit, real exchange rate appreciation, slower growth, political instability as well as possible contagious effects. The second part describes how the crisis evolved, what defence was used by the central bank, and how the pegged regime was abandoned and replaced by the managed float.
Core and periphery in the world economy: an empirical assessment of the integration of the developing countries into the world economy
In this paper a dynamic structural vector-autoregressive model is utilized to analyze the impact of shocks from the developed center (G-7) on the less developed periphery. Three possibilities emerge with less developed nations being negatively dependent on the center, positively integrated with the center, or independent of the center. A less developed country is classified as negatively dependent when shocks from the center have a negative impact and are relatively important in explaining variations in the output of the developing country. A less developed country is positively integrated if the shocks from the center have positive effects and explain a large share of the variation in output in the developing country. The results indicate that from the sample of eighty-six developed countries only five could be considered dependent, while the others are roughly equally divided into those positively integrated and those that are independent.
Economic integration in Central America and the Caribbean
The costliness of economic integration is partly dependent upon whether shocks to regions or groups of nations are symmetric or asymmetric in their impacts. This paper uses a structural vector autoregressive model to determine whether exogenous shocks have symmetric or asymmetric effects for a group of Caribbean and Central American nations. The results indicate that there are likely to be significant costs to extensive economic integration in these regions. There is support for integration encompassing limited combinations of countries.
Stability of Monetary Unions: Lessons from the Break-up of Czechoslovakia
In 1993, Czechoslovakia experienced a two-fold break-up: On January 1, the country disintegrated as a political union, while preserving an economic and monetary union. Then, the Czech-Slovak monetary union collapsed on February 8. We analyze the economic background of the two break-ups, and discuss lessons for the stability of monetary unions in general. We argue that Czechoslovakia fulfilled some of the optimum currency area criteria, however, given the low correlation of permanent shocks, it appears it was relatively less integrated than some other existing unions. That, along with low labor mobility and a higher concentration of heavy and military industries in Slovakia, made the Czechoslovak economy vulnerable to asymmetric economic shocks-such as those induced by the economic transition. Furthermore, the Czech-Slovak monetary union was marred by low credibility, lack of political commitment, low exit costs, and the absence of fiscal transfers.
The Break-up of Czechoslovakia: an In-depth Economic Analysis
Reviews the book: “The Break-up of Czechoslovakia: an In-depth Economic Analysis,” by Dedek, Oldrich et al.,
On the European monetary system: the spillover effects of German shocks and disinflation
We analyse the disinflationary experience between 1979-93 for two traditionally inflationary countries of the European Monetary System: France and Italy. For each country, a vector autoregressive model is estimated. Shocks in the model combine domestic and foreign sources. The latter capture the world oil price shocks as well as nominal and real shocks originating in Germany. Under investigation is the hypothesis that shocks originating in Germany have a spillover disinflationary effect in France and Italy. The empirical evidence provides support to the validity of this hypothesis. Furthermore, German shocks account for an important share of the total price variance in France and Italy. These results indicate that the interaction between countries of the European Monetary System has contributed to the success of the disinflationary experiences of the 1980s. The evidence sheds, therefore, some light on potential benefits that may be further realized as countries of the European Monetary System move towards their objective of achieving a single currency under a united monetary system.
Investigations into the macroeconomic interdependence of Western Europe: Is there evidence for two-tier Europe?
In this paper we investigate whether the degree of interdependence of some macroeconomic variables (real output, government expenditures, private consumption, trade flows, inflation rate, and money supply) supports the division of western European countries into two different blocks. We divide western European countries into core and periphery according to their geographical location in order to avoid the problem of characterizing the countries so that the results fit into preconceived ideas. Then we check the robustness of this division by a variety of econometric techniques, namely a structural vector autoregressive model, principal component analysis, and tests for common trends and common cycles among these variables. The results are not decisive, however there is some support for the core-periphery distinction.
Optimum currency areas and European monetary unification
This paper examines the European experience from optimum currency areas perspective with a focus on the correlation of underlying aggregate shocks within a structural vector autoregression (VAR) framework. Appropriately identifying supply shacks, real fiscal shocks, and nominal shocks, the paper investigates the correlations of shocks and tries to evaluate the likely adjustment and other problems that may take place with the introduction of a single currency in Europe. Using data for 20 European market economies, the paper compares original members of the European Community to new members and non-members. Shocks are mostly country-specific, particularly for newer members anti non-members, suggesting the importance of alternative adjustment mechanisms other than national monetary policies after the introduction of a single currency.
Macroeconomic interdependence and integration in the Indian sub-continent
This study investigates macroeconomic interdependence of countries in the Indian subcontinent and discusses its implications on the possible integration schemes. Towards this goal, the interrelatedness, the degree of coherence and the long and short term movements in selected macroeconomic variables in seven countries of this region are explored. Moreover, in a dynamic structural vector autoregressive similar economic disturbances to satisfy one of the conditions for forming a currency area in the spirit of Mundell's theory. We observe that the degree of interdependence among countries of the Indian sub-continent is rather low. These countries should probably continue with liberalization efforts, which naturally lead to higher macro-interdependence among them, which would later create a solid ground for future integration efforts. Moreover, they should not experiment with pegging their exchange rates among each other, rather, in future, they should rely more on the floating rates.