Financial adaptation of sectors in the Hungarian economy during the coronavirus pandemic
BÉLA KÁDÁR – SZILÁRD HEGEDŰS
The coronavirus pandemic and the measures taken to mitigate its effects have had a significant impact on the Hungarian economy, with varying degrees of impact in different industries. The aim of the study is to analyse the financial performance of the industries affected by the pandemic and to identify the distressed and so-called zombie companies in the Hungarian economy. The research draws on financial data from more than 68,000 Hungarian small, medium and large enterprises for the period 2019-2022, with a particular focus on EBIT and revenue indicators. A new feature of the paper is an in-depth analysis of the sectoral changes caused by the pandemic and the structural weaknesses of the economy during the crisis. The results show that five of the 74 industries surveyed were particularly vulnerable, while the use of credit support was more widespread than the direct impact of the crisis would have justified. The study contributes to a better understanding of the resilience and weaknesses of the Hungarian economy to crises, helping to take targeted economic policy decisions.
Changes in the external financing of Central and Eastern European catching-up models after the 2008 crisis
TAMÁS TIBOR CSONTOS
This paper examines how external financing has changed in the catching-up models of Central and Eastern Europe after the 2008 crisis. The theoretical framework is based on the growth model literature, which has become a dominant trend in comparative political economy in recent years, but has so far paid little attention to the relationship between growth models and external financing. The paper uses comparative statistical analysis to illustrate changes in external financing, focusing on FDI flows, EU subsidies, remittances of foreign workers and changes in external debt. The results show that the role of FDI and external debt in external financing declined after the crisis, while the importance of EU grants and workers’ remittances increased. The study distinguishes three different groups of countries in terms of external financing, of which only one has remained FDI-oriented.
Domestic experiences of catching up and sustainability in the two decades after Hungary’s EU accession
IVÁN BÉLYÁCZ
This article examines the relationship between Hungary’s catching up and sustainability based on economic developments over the last twenty years. It analyses the consequences of enforcing economic growth and overheating the economy, the aftermaths of investment-centred economic policies, and playing down consumption. The author takes the view that, in the face of heightened government activism, increasing productivity, neglecting sectors and companies that generate high added value, permanently supporting an over-preferred group of companies, and marginalising the knowledge economy and green transition, are counterproductive to catching up based on environmental, financial and functional sustainability, and cannot be funded by the budget in a state of chronic over-allocation of resources. All this could lead to domestic socioeconomic development diverging from progressive international trends.
Freedom in trouble
Review of Joseph E. Stiglitz’s book The Road to Freedom – Economics and the Good Society (Melbourne, Allen Lane, 2024, e-book, 314 p.)
BENEDEK LITS
This review deals with Joseph E. Stiglitz’s book entitled The Road to Freedom, published in April 2024. The book aims to unravel the false dichotomy between freedom and security in economic theory and economic policy in an era when both economic and political governance see the triad of transactionalism, geopolitics and anti-freedom security as the key to progress. The review could not have been written with any other intention than to illustrate this, to present the main lines of argument in the book chapter by chapter, to put the issues in context where the text requires, to critique them, and finally to draw conclusions about freedom and what it really means.
Acquiescence cannot be the goal
Review on the book Kutasi Gábor (ed.): Economic policy. Economic governance of open economies (Ludovika Publishing House, Budapest, 433 pages)
OLIVÉR KOVÁCS
Economic policy is the area through which economics students can best experience that the knowledge provided by mainstream textbooks is far from being sufficient to understand what is really going on in the complex, open and dynamic socio-economic innovation ecosystem. The present volume under review, based on the contributions of 22 authors, suggests precisely that economic policy requires constant vigilance, attention, a holistic approach and a modern economic governance philosophy that seeks to understand the complexity and evolution of the global economy, while consciously avoid any kind of deceptive acquiescence.
The development of the rules of jurisdiction for cross-border individual employment contracts in the light of the relevant case law of the Court of Justice of the European Union
IBOLYA NAGY
The nature of employment contracts is that the legal relationship is asymmetrical so that in cross-border employment relationships, the employee is in the weaker party’s position for several reasons: first, due to the hierarchical relationship between the employee and the employer and, second, because in cross-border employment contracts, there is necessarily an international element (for example the habitual workplace or the place of establishment of the employer), which may differ from the employee’s rights. Private international law limits the parties’ autonomy, so an employer with considerable economic and information power cannot choose the jurisdiction of a court of a state that does not provide an adequate level of protection for the employee. The paper analyses the increasing presence of weaker party protection measures in the rules of jurisdiction through the relevant case law of the European Court of Justice.