The fate of battery waste: regulation and technology
DÓRA GYŐRFFY
The paper examines what happens at the end of the battery value chain, i.e. what happens to waste, in the context of the development of the battery industry in Hungary. To answer this question, it first analyses the new European battery legislation, adopted in the summer of 2023, which imposes very strict quality and recycling obligations on producers. The second half of the paper will present the recycling process from collection to processing, based on international literature, with a focus on the issue of profitability. It then argues that the establishment of the battery value chain in Hungary makes it almost inevitable that waste processing will also be in Hungary, which is an overall unprofitable activity given the currently available technologies. The question is who pays the losses. This leads to the conclusion that, in stark contrast to European objectives, the state-subsidised Hungarian battery industry is increasingly dependent on China, damaging the environment, and undermining the country’s development potential.
Journal of Economic Literature (JEL) codes K32, L52, L62, O14, O25.
Wage inequalities in global value chains: the case of the Hungarian battery industry
MÁRTON CZIRFUSZ
The battery industry, which serves the electric vehicle industry, is currently expanding in Hungary. Nearly 40 companies in Hungary will employ more than 30,000 people by the mid- 2020s. Drawing on the global value chain literature and the analysis of corporate finance data, the paper explores the share of labour in the value creation of companies involved in the battery industry. The cell manufacturing industry is the smallest contributor, but the pre-tax profits are significant elsewhere in the value chain. Wages differ between the direct core workers, domestic and third country agency workers. Direct workers can have the most significant impact on increasing the wage share, while third-country agency workers are the most vulnerable. In the context of the analysis of battery value chains, the study also points to methodological limitations of analysing corporate finance data.
Journal of Economic Literature (JEL) codes: E24, F23, L62, O15, P12.
Ownership and market structure changes in the Hungarian banking sector
ÉVA VÁRHEGYI
The Orbán government that came to power in 2010 envisaged significant changes in the banking sector as well as in other sectors qualified strategic by announcing that the proportion of national ownership should be enhanced to at least 50 percent; and the National Bank of Hungary, which supports the government’s banking policy, considered it desirable to reduce the number of credit institutions and intensify market concentration. The achievement of these goals was facilitated by the fact that after the global credit crisis of 2008, state interventions in competitive markets strengthened all over the world, especially in the financial sector. The article analyses the most important characteristics of the changes in ownership and market structure that took place in the Hungarian banking sector between 2010 and 2023, and then formulates hypotheses about the expected consequences in the operation of the sector and the inherent risks. Government actions transforming the sector raised the risk for society primarily by transferring a quarter of banking assets to private owners influenced by political power, which is unprecedented in the developed world.
Journal of Economic Literature (JEL) codes: G21, G28, P14.
A review of Markus K. Brunnermeier – Ricardo Reis: A Crash Course On Crises. Macroeconomic Concepts For Run-Ups, Collapses, and Recoveries
(Princeton University Press, 2023, 123 pages)
KÁROLY ATTILA SOÓS
The book aims at interpreting and presenting the logics and mechanisms of economic crises. These logics and mechanisms are being discussed by the authors as manifestations of relationships between macroeconomics and finances. After the analysis of processes and phenomena paving the way towards crises, we can read separately about triggers of crises on the one hand and about those factors – according to the concepts of general control theory, positive feedbacks –, which aggravate crises on the other. Finally, an important subject discussed in the book is governments’ reaction to the crises, both with its monetary and fiscal components.
Journal of Economic Literature (JEL) codes: D53, E30, E44, E52, E62.
review and reflections
Judit Karsai: From the Incubator to the Stock Exchange – The Functioning of Institutions Financing Start-ups in East-Central Europe
(Centre for Economic and Regional Studies, Institute of Economics, Budapest, 2023, 226 pages)
PÉTER BUCSKY
The countries of Central and Eastern Europe have embarked on the public funding of start-ups with great vigour in the 21st century. The emergence of new technologies is creating opportunities for transition countries to create companies that can capture a larger international market share. It is no coincidence that there is a strong demand to build local companies that can sell high value-added technologies in the global market. Following the transition to the market economy, the emergence of transnational corporations has succeeded in replacing the socialist planned economy with market-based systems integrated into the world economy, but there has been little role for locally owned and/or managed enterprises, or in a broader sense, local capital. Focusing on the role of the state and EU funds, this book demonstrates to what extent venture capital in Central and Eastern Europe is similar and different from that in developed countries.
Journal of Economic Literature (JEL) codes: M13, G24.