Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/83569 
Year of Publication: 
2007
Series/Report no.: 
MNB Working Papers No. 2007/3
Publisher: 
Magyar Nemzeti Bank, Budapest
Abstract: 
This paper attempts to aggregate and summarise 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 synthesising particular results based on Mishkin’s (1996) classification. We analyse how aggregate demand is affected through those channels. Our conclusion is that during the past ten years monetary policy did exert a measurable influence on real activity and prices. The dominance of the exchange rate channel explains why prices respond faster and output responds more mildly than in closed developed economies like the U.S. or the euro area. 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 euro area in terms of monetary transmission.
Subjects: 
monetary transmission mechanism
monetary policy shock
exchange rate channel
JEL: 
E44
E52
E58
Document Type: 
Working Paper

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