This paper explores three areas in which the experience of the Great Depression might be relevant today: monetary policy, fiscal policy and the systemic stability of the banking system. We confirm the consensus on monetary policy: deflation must be avoided. With regard to fiscal policy, the...

The recent recession has brought a sharp decrease in income, output, and world trade, as well as an increase in unemployment in developed and underdeveloped countries. Experts such as Paul Krugman, Christina Romer, or Barry Eichengreen, compare the current situation with the Great Depression of...

The welfare state was created after 1950 with counterproductive mechanisms and this caused high inflation and high unemployment and stagnating growth by 1970, called stagflation. Since 1970 governments redressed the welfare state but did not succeed in finding workable mechanisms. They rather...

This working paper examines monetary aggregates as means of explaining economic activity. Comparative analysis of the Great Depression and the years 2007-11 is used to test the explanatory power of monetary aggregates in accordance with their use in monetarist explanations of the Great...

From the policy mix theory to the related empirical works, quantifying the degree of coordination of monetary and fiscal policies seems to be missing. In this paper, we propose an index (ICPM) which measures the coherent nature of the policy mix rather than it restrictive or expansive character....

From the policy mix theory to the related empirical works, the quantification of the coordination of monetary and fiscal policies seems to be missing. In this paper, we propose an index (PMCI) which measures the coherent nature of the policy mix rather than it restrictive or expansive character....

Keynes’ original intention in introducing the concept of a liquidity trap was to explain the reason why persistent large amounts of unutilized resources were generated during the Great Depression. This paper shows that this type of phenomenon cannot be explained in the framework of a...

A policy mix characterized by a monetary policy whose main objective is price stability and fiscal policy under fiscal discipline can he permit to keep prices and production levels of social optimum to sustain economic growth ? In this paper, an index of the policy mix is ​​built for...

In October 2008 the main Hungarian public finance actors: the government, the National Bank of Hungary (MNB) and experts cited the high public debt and volume of unsecured foreign-currency loans as the main reasons for the economy’s vulnerability. On the other hand according to the formal...

This paper analyses the issue of the dynamics of the TARGET2 system balances during the sovereign debt crisis. The development of these balances reflects the change in the distribution of the monetary base among the EMU Member States. During the sovereign debt crisis, while some countries, among...