DOCSLIB.ORG

ECB Presidency and Inflation Aversion Among the Citizens of European Countries

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
ECB Presidency and Inflation Aversion Among the Citizens of European Countries Special ECB PRESIDENCY AND In fact, there is some empirical evidence in favor of the hypothesis that the degree of inflation aversion INFLATION AVERSION AMONG differs between countries. For example, Shiller THE CITIZENS OF EUROPEAN (1997) finds the average percentage of US and Brazilian citizens fully agreeing with the statement COUNTRIES: AN EMPIRICAL that controlling inflation to be one of the most important tasks of economic policy to be 56 percent SSESSMENT A while the referring percentage of the German citi- zens is 76 percent and thus considerably larger. MICHAEL BERLEMANN* Similarly, Scheve (2004) finds significant national differences in inflation aversion in his study of 20 countries around the globe. However, empirical Introduction evidence on the degree of inflation aversion among EU member states is yet not available. In October 2011 the regular term of office of the cur- rent President of the European Central Bank (ECB) In this article we aim at shedding some light on the Jean-Claude Trichet expires. Somewhat unexpectedly, degrees of inflation aversion among the citizens of the favorite candidate as successor, Bundesbank EU member countries. We therefore employ aggregate President Axel Weber, declared his resign in early data collected from the Eurobarometer Survey of the February. In the aftermath speculation has been European Commission covering 2007 to 2010.1 After mounting about who will take over the job as the briefly discussing possible causes for inflation aver- head of the ECB. As it is often the case in interna- sion, presenting the utilized data, explaining the tional organizations and especially the European empirical approach and presenting the estimation Union, the discussion about the candidates was dom- results we turn to a discussion of the implications of inated by their nationalities. While many specialists our results for the question who should become the considered the Bank of Italy chief Mario Draghi to next ECB president. be the best qualified and most natural candidate for the ECB presidency, others argued that Italy’s record of high inflation and massive debt would make Possible Causes of Inflation Aversion Draghi an inacceptable candidate, especially for countries claiming to have a deeply rooted stability Inflation aversion is the result of the likely effects of culture like Germany. Consequently, German both anticipated and unanticipated inflation. The Chancellor Angela Merkel initially hesitated to sup- effects of inflation on microeconomic behavior and port Draghi and considered supporting another macroeconomic outcomes have been subject to Dutchman, Nout Wellink, coming from a country excessive discussions among economists (see e.g. with (perceived) similar macroeconomic preferences. Briault 1995; Edey 1994). There is little disagreement Even when Silvio Berlusconi and Nicolas Sarkozy on the effects of inflation on nominal variables. Most announced to support Draghi in late April it took economists agree that higher inflation leads to one to another 3 weeks before Angela Merkel was willing to one increase in nominal wages or nominal interest support the Italian candidate. The major reasoning rates, provided that there are no institutional barriers behind the discussion of the candidates’ nationalities to adjustments (Parkin 1994). Most economists will bases on the expectation that citizens from different also agree that inflation causes different sorts European countries exhibit differing degrees of infla- of transaction costs such as shoe-leather costs tion aversion which carry over to the presidents of (Bailey 1956; Briault 1995), menu costs (Manki 1992) their central banks. 1 Focusing on this period allows covering all actual EU member * Helmut Schmidt University Hamburg. countries plus Turkey as an EU candidate. CESifo Forum 2/2011 88 Special or bureaucratic costs (Karmann and Graff 1997). state.2 Since the number of member states increased in However, it is less clear in how far inflation exerts the course of time and also some of the accession effects on economic growth and/or unemployment. countries are included, the number of surveyed coun- While some authors argue that inflation positively tries varies from survey to survey. We make use of affects economic growth (Mundell 1963 and 1965), aggregate data from the Eurobarometer provided by the opposite view results from overlapping genera- Zentralarchiv für Empirische Sozialforschung (ZA).3 tions models (see e.g. Samuelson 1958; Wallace 1980). However, there are also models in which inflation is Our dataset covers the 7 waves of the Eurobarometer ‘super-neutral’ (Sidrausky 1967). The empirical evi- survey: Spring 2007 (EB 67) to Spring 2010 (EB 73). dence is also somewhat mixed (see e.g. Kormendi and In order to measure inflation aversion we focus on the Meguire 1985; Grimes 1991; Barro 1995; Sarel 1996). answers on the question: ‘what do you think are the Inflation might also have re-distributional effects. two most important issues facing (OUR COUNTRY) According to the wage-lag hypothesis prices tend to at the moment?’ This question was asked in all 7 waves run ahead of increases in money wages, leading to and every EU member country. The respondents lower real wages and increased profits (Keynes 1940). could choose up to two answers from the following According to the transfer-income-lag hypothesis mar- catalogue: crime, economic situation, rising prices\ ket incomes (wages, profits) react considerably quick- inflation, taxation, unemployment, terrorism, er on inflation than primarily politically or institu- defence\foreign affairs, housing, immigration, health- tionally determined transfer incomes like pensions, care system, educational system, pensions, environ- unemployment benefits or welfare aids (Pohl 1981). ment and energy. The debtor-creditor hypothesis argues that wealth is redistributed from creditors to debtors when- In Figure 1 we show the average percentage of respon- ever inflation is not fully anticipated in loan contracts. dents per country answering ‘rising prices\inflation’ to Again, the empirical evidence is mixed (Li and be among the two most important problems. Zou 2002). Obviously, the percentages differ considerably between the EU member countries. The citizens of the Interestingly enough, a significant share of the pop- Scandinavian EU member countries mention infla- ulation seems to have neither a clear idea of what the tion quite rarely among the most important problems. typical causes of inflation are nor which conse- On average only 1 out of twenty respondents from quences result from inflation (see Shiller 1997). Sweden answered inflation to be one of the most Nevertheless, the public is typically much concerned important problems. The percentages are only slightly with inflation. For example, DiTella, MacCulloch higher in Denmark (8 percent), the Netherlands and Oswald (2001) find inflation to contribute sig- (11 percent), Turkey (12 percent), Britain (12 percent), nificantly to explain life satisfaction on the cross- Spain (18 percent), Ireland (20 percent) and Finland country level when studying data for 12 European (20 percent). The countries with the citizens most countries from the Euro barometer Database over the often answering inflation to be among the most period 1975 to 1991. Figure 1 IMPORTANCE OF INFLATION AS A MAIN PROBLEM IN THE EU COUNTRIES Data Results of the Eurobarometer (2007–2010) Latvia Lithuania Austria For our study we employ data Slovenia Malta Bulgaria from the Eurobarometer, a survey Romania Estonia conducted biannually by the Portugal Italy Hungary European Commission. The stan- Cyprus Luxembourg Greece dard Eurobarometer was estab- Belgium Czech Rep. lished in 1973. Each survey con- France Germany Slovakia sists of approximately 1,000 face- Poland Finland Ireland to-face interviews per member Spain UK Turkey Netherlands Denmark 2 Exceptions are Germany (2,000), Lu - Sweden xembourg (500) and Britain (1,300 includ- 0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35 0.40 0.45 0.50 ing 300 in Northern Ireland). average percentage of respondents answering inflation in % 3 We make use of the Eurobarometer Source: Own calculations based on Eurobarometer survey (2007–2010). waves EB 67 to EB 73. 89 CESifo Forum 2/2011 Special important problems facing the country are Latvia inflation rate in the three months before the (45 percent), Lithuania (44 percent), Austria (41 per- Eurobarometer wave was completed) and the answers cent), Slovenia (40 percent) and Malta (40 percent). of the respondents. Germany, which is often judged to be one of the countries with the most inflation-averse citizens, ranges in the middle of the field of the members states Uncovering citizens’ inflation aversion of the European Union (31 percent). In order to uncover the true degree of inflation aver- However, the pure percentage of citizens, identifying sion among the citizens of the EU member countries inflation as major problem is not informative with it is thus necessary to relate the answers of the respon- respect to their inherent degree of inflation aversion. dents to the inflation performance at the time and This becomes obvious when considering the usually place when the survey was conducted. In order to do employed loss function in macroeconomic models. so, we employ a two-step procedure. In the first step Typically, this loss function is assumed to be of the we pool the data and then regress the percentage of type citizens, answering inflation to be among the most important problems (m), on the average inflation rate 1 2 1 2 (1) * * (π) in the three months before the referring l t D St S E y t y 2 2 Eurobarometer wave was completed. Thus, the equa- tion to be estimated is with lt = the loss in period t, π = inflation, π* = socially optimal inflation, y = output, and y* = (2) mi,t = c +γ ⋅π i,t + εi,t socially optimal output. The parameters α and β are weighting factors with α being the degree of infla- tion aversion. In the second step we employ the estimated constant c ˆ and the parameter Ͳˆ to calculate the unexplained Whenever a respondent answers inflation to be among residuals εi,t.
Load more

Recommended publications
  • The Italian Candidate: the Appointment of Mario Draghi to the Presidency of the ECB
    6 The ITalIan CandIdaTe: The appoInTmenT of marIo draghI To The presIdenCy of The eCB Kenneth Dyson and Lucia Quaglia After prolonged negotiations, on 24 June 2011, the governor of the Bank of Italy, Mario Draghi, was appointed president of the European Central Bank (ECB) as successor to Jean-Claude Trichet. His mandate runs from 1 November 2011 to 31 October 2019. Draghi’s appointment was consistent with a long-standing practice of Italian politicians and officials seeking to engage with the process of European integration by ensuring that they were “sitting at the European top table.” In the context of the euro area, sitting at the top table for Italy was initially about gaining euro entry as a founding member state in 1999 and, subsequently, about having strong Italian representation in the gov- erning structures of the euro area, particularly the ECB.1 Once the sovereign debt crisis became contagious in 2010–2011, it meant ensur- ing that financial markets drew a clear distinction between Italy and periphery member states such as Greece and Portugal that suffered from sovereign debt distress. However, retaining a seat at the European high table did not prove easy. First, Italy qualified late for euro entry, with little safety margin and the help of some last-minute and somewhat controversial fiscal measures and in the face of much German skepticism. Second, the cir- cumstances surrounding the resignation in 2005 of the Bank of Italy’s governor, Antonio Fazio, damaged Italy’s reputation. Third, by the Italian Politics: From Berlusconi to Monti 27 (2012): 155–171 © Berghahn Books doi:10.3167/ip.2012.270109 156 Kenneth Dyson and Lucia Quaglia summer of 2011, Silvio Berlusconi’s government was battling against a loss of financial market credibility.
    [Show full text]
  • Mario Draghi: Welcome Remarks
    Mario Draghi: Welcome remarks - 8th ECB conference on central, eastern and south-eastern European countries Welcome remarks by Mr Mario Draghi, President of the European Central Bank, at the 8th ECB conference on central, eastern and south-eastern European countries, Frankfurt am Main, 12 June 2019. * * * Dear guests and colleagues, It is a great pleasure to welcome you to the eighth ECB conference on central, eastern and south-eastern European (CESEE) countries. There are many differences between the 18 economies in the CESEE region1, but one thing they have in common is that they have all experienced real economic convergence towards the EU average since the 1990s. Over the last two decades, in particular, real GDP per capita growth has averaged 3.8% in the region, compared with 1.4% in the European Union (EU) as a whole. But there has been a clear difference in the pace of convergence.2 Countries that have joined the EU, and which are hereafter referred to as the central and eastern European (CEE) economies,3 reached GDP per capita levels of 70% of the EU average. Within this group, the countries that have joined the euro area have grown even faster, reaching almost 80% of the EU average. In contrast, catching up has been markedly slower in the economies outside the EU, with income levels below 40%4 of the EU28 average.5 EU and euro area membership acted as a catalyst for convergence, creating the institutional and economic conditions for CEE economies to adopt highly effective growth strategies. Their faster convergence shows that, with high-quality institutions in place, the EU Single Market can be a powerful engine of growth, allowing not only the poorer countries to catch up, but also the richer countries to benefit from a larger market and opportunities to increase production efficiency.6 However, in order to maintain convergence and reap lasting benefits from the Single Market and euro area membership, efforts to ensure institutional quality and good governance have become all the more important given the headwinds facing CEE economies.
    [Show full text]
  • Mario Draghi: Interview with Europe 1
    Mario Draghi: Interview with Europe 1 Interview with Mr Mario Draghi, President of the European Central Bank, with Europe 1, conducted by Mr Jean-Pierre Elkabbach on 23 September 2014, aired on 24 September 2014. * * * Europe 1: You have already acted decisively in June and September. If unemployment continues to grow, can the ECB continue to stimulate the economy? Monetary policy will stay accommodative for a long time and I can say that the Governing Council is unanimous in its commitment to use the available instruments within its mandate to bring inflation back to close but below 2%. Interest rates will stay at the present level for an extended period of time because they can’t go much lower than that. In Europe, is there a risk today of deflation or even of recession? For the euro area as a whole we don’t see risk of deflation. We see risk of too low inflation for too long a time and for the euro area as a whole, as I’ve said many times our recovery is modest, weak, uneven, and fragile, but it’s not recession. Do you have a lot of liquidity at the ECB? Yes, we’ve shown that we have a lot of liquidity in the ECB. And could you show it again? And we’re certainly, as I said before, we’re certainly ready to use all the instruments within our mandate to make sure that… To obtain more of growth by 2017, 2018: what needs to be done? One talks about developing infrastructure and about investing.
    [Show full text]
  • How Macron Won It All the French President As Master Kingmaker
    How Macron Won It All The French president as master kingmaker. he French did it again. By recalling Christine Lagarde, who has served as managing director of the International Monetary Fund since 2011, from Washington and throwing her into the race to succeed Mario Draghi as By Klaus C. Engelen head of the European Central Bank, French President Emanuel Macron effectively won the real power game in the competition for the top European positions after the May elections for the European Parliament. But since Macron helped nominate, in a big surprise, Ursula von der Leyen, Tthe Brussels-born francophone long-time member of German Chancellor Angela Merkel’s government, to lead the new EU Commission, the disappoint- ment in Germany of not seeing Bundesbank President Jens Weidmann chosen as Draghi’s successor may have been somewhat mitigated. HOW MACRON GOT THE POLE POSITION When the race for the new EU chief executive began, the French presi- dent started questioning the system of Spitzenkandidaten (lead candidates). Macron referred to the Lisbon Treaty, which left the Council in the lead role to select and propose a candidate whom the European Parliament then would have to confirm with an absolute majority. The Council consists of the heads of state or governments of the member countries, together with its president and the president of the Commission. In Macron’s view, the 2014 European election, when the center-right European People’s Party got Jean-Claude Juncker elected Commission president with the help of the Progressive Alliance for Socialist and Democrats, was THE MAGAZINE OF INTERNATIONAL ECONOMIC POLICY an aberration to be corrected.
    [Show full text]
  • GSS21 Program Grid Draft External Version.Xlsx
    Global Solutions Summit 2021 - May 27-28 Time Studio Salon Forum 1 Forum 2 Forum 3 May 27 Opening Address and Welcome by Dennis 12:00- 12:10 Snower May 27 12:15- 12:30 Towards Global Realignment May 27 G20 Sherpa Panel 12:30- 12:45 May 27 Keynote: Sri Mulyani Indrawati (tbc) 12:45 - 13:00 May 27 13:00 - 13:15 May 27 Opening Plenary: The Great Realignment for 13:15 - 13:30 a better Future May 27 13:30 - 13:45 May 27 short break 13:45 - 14:00 May 27 Keynote: Minister Jens Spahn Keynote: Enrico Giovannini 14:00 - 14:15 A Global Green Deal? Building a better future of work through Constrained by Accounting May 27 Keynote by Frans Timmermans good jobs and upskilling Pandemic preparedness as a global 14:15 - 14:30 challenge: lessons from Covid-19 Leveling-up to tackle regional disparities May 27 TF 1 Panel 14:30 - 14:45 Networking Break Networking Break Networking Break May 27 Networking Break Networking Break 14:45 - 15:00 May 27 Interview: Minister Olaf Scholz Keynote Keynote Healing multilateralism: how multi-level Global Challenges to Migration after COVID- 15:00 - 15:15 governance can solve global problems 19 May 27 Breaking up the linear economy in Emerging TF 8 Panel TF 10 Panel 15:15 - 15:30 Towards a Strong G20 for Effective Helping young people to work makes the Countries: Circular Economy Vision Setting May 27 Multilateral Cooperation world work Panel short break short break 15:30 - 15:45 May 27 short break short break short break 15:45 - 16:00 The policy implications of geoeconomic May 27 strategies Keynote: Valdis Dombrovskis Interview: Vera Jourová 16:00 - 16:15 Localising the circular economy imperative May 27 The New Trade Governance Agenda: What Keynote: Minister C.
    [Show full text]
  • France: Negative Rates Shouldn't Mean You Ease up on Debt
    21 June 2019 France: Negative rates shouldn’t mean you ease Opinion up on debt reduction French 10-year benchmark yields briefly went into negative territory after the ECB President, Mario Draghi's Sintra speech this week (and some tweets by President Trump). But being paid to take on more debt should not encourage reckless spending ECB President, Mario Draghi talks with the French President, Emmanuel Macron in 2018 Something of an historic event happened in France following Mario Draghi's speech in Sintra on 18 June: the benchmark rate on 10-year government bonds fell below 0%, following German bonds into negative territory. The speech went a little further than Mr Draghi’s comments in Frankfurt (after the June monetary policy meeting) where he only mentioned, in response to a question, the fact that new easing measures had been discussed. By saying in Sintra that "in the absence of improvement, such that the sustained return of inflation to our aim is threatened, additional stimulus will be required", he boosted the likelihood of a further deposit rate cut (currently at -0.40%) starting in July. French 10-year yields did not stay negative for long, merely minutes, but shorter maturities (up to 6 years) were already negative. The 0% threshold for 10-year government bonds is not just symbolic. Neither are the signs given by the ECB that rates will stay low for longer. These developments should indeed incentivise the French Government to continue to increase the general maturity of the public debt, in other words, to ensure that it is financed at low rates for a longer time.
    [Show full text]
  • Calendar of Mario Draghi, February 2017 1
    Calendar of Mario Draghi President of the ECB February 2017 Meeting / Event Date (incl. topic / meeting participants, as applicable) Location Thursday, 2 February ECB and Banka Slovenije joint conference on occasion of Ljubljana 10th anniversary of adoption of the euro – speech on “Security through unity: making integration work for Europe” Monday, 6 February Quarterly Hearing before the Committee on Economic and Brussels Monetary Affairs (ECON) of the European Parliament Tuesday, 7 February Executive Board ECB Thursday, 9 February Meeting with Chancellor of Germany, Ms Angela Merkel, on Berlin euro area developments Meeting with media Berlin Monday, 13 February Meeting with International Monetary Fund (IMF), Mr Vítor ECB Gaspar, on euro area economic developments Tuesday, 14 February Executive Board ECB Meeting with AXA, on EU economic and financial ECB developments Meeting with Japanese Bankers Association (JBA), French ECB Banking Federation (FBF) and Association of German Banks (BdB), on current regulatory and general supervisory issues (also attended by the Vice-President and the Vice- Chair of the SSM Supervisory Board) Wednesday, 15 February Governing Council ECB Monday, 20 February Eurogroup Brussels Meeting with President of the European Court of Auditors Brussels (ECA), Mr Klaus-Heiner Lehne, on audit issues Tuesday, 21 February Executive Board ECB Calendar of Mario Draghi, February 2017 1 Reception organised by Ambassador of France to the London United Kingdom on occasion of ceremony to award insignia of Chevalier de l’Ordre national de la Légion d’honneur to Mr Lionel Barber Monday, 27 February Meeting with media ECB Tuesday, 28 February Executive Board ECB Calendar of Mario Draghi, February 2017 2 .
    [Show full text]
  • Download the Transcript
    TRANS-ATLANTIC-2019/02/07 1 THE BROOKINGS INSTITUTION FALK AUDITORIUM ITALY, EUROPE, AND THE FUTURE OF TRANS-ATLANTIC RELATIONS Washington, D.C. Thursday, February 7, 2019 PARTICIPANTS: Introduction: JOHN R. ALLEN President The Brookings Institution Keynote Remarks: PAOLO GENTILONI Distinguished Fellow, Foreign Policy The Brookings Institution Moderator: THOMAS WRIGHT Senior Fellow and Director, Center on the United States and Europe The Brookings Institution * * * * * ANDERSON COURT REPORTING 1800 Diagonal Road, Suite 600 Alexandria, VA 22314 Phone (703) 519-7180 Fax (703) 519-7190 TRANS-ATLANTIC-2019/02/07 2 P R O C E E D I N G S GENERAL ALLEN: Ladies and gentlemen, welcome, and good morning. Wonderful to have you at the Brookings Institution this morning. My name is John Allen, I'm the president of the Institution and I have the honor today of introducing an event, which is sponsored by the Alan and Jane Batkin International Leaders Forum and the Robert Bosch Foundation, and we are deeply grateful for their continued support of the work that we do here today. We have the pleasure of being joined by a number of distinguished guests who will be joining for the entire event. But in particular we're very honored to have the former prime minister of Italy, Paolo Gentiloni, joining us this morning. And seated in the front row with him, and a very warm welcome to the Italian Ambassador Armando Varricchio and his wife, Micaela, and also the wife of Prime Minister Gentiloni, Emanuela. As well, Ambassador Schuwer is here this morning from the Netherlands.
    [Show full text]
  • Mario Draghi: Interview in Die Zeit
    Mario Draghi: Interview in Die Zeit Interview with Mr Mario Draghi, President of the European Central Bank, in Die Zeit, conducted by Mr Giovanni di Lorenzo on 17 December 2014, published on 15 January 2015. * * * You have a clear-cut reputation. Luca di Montezemolo, the former CEO of FIAT and Ferrari who attended the same school as you in Rome, said that you were always the most competent and serious one – Mario, the prize pupil. He exaggerates. I’ve never regarded myself as the best. Most certainly not. I went to school because I was sent there. But you may have felt the burden of responsibility more than others: you lost your father at the age of fifteen, and your mother passed away only a little later. You were suddenly a very young head of family. I can remember when, as a 16-year-old, I came back from holidays at the sea with a friend. He went home and could do what he liked. I, by contrast, was confronted with a stack of letters that I had to deal with, bills that had to be paid. But young people do not reflect on what they have to deal with and how they should do so. They simply get on with it. That is important, that is what prevents them from becoming depressed even in adverse circumstances. They perhaps also understand at an early stage what they must do to survive, for example, work hard. Belief in hard work was something that my parents taught us. My father used to say that work is the most important element in any person’s life.
    [Show full text]
  • Joint Letter to President Anastasiades of Cyprus Concerning Laundering of Massive Criminal Schemes by Corrupt Russian
    His Excellency Nicos Anastasiades President of the Republic of Cyprus Strasbourg, 26 October 2017 Dear President Anastasiades, We write to you with grave concern about the role that corrupt Russian government officials are playing in Cyprus in relation to the laundering of massive criminal schemes coming from Russia. We are equally concerned that while Cyprus is neglecting its duties under the European Directives to combat money laundering, the Cypriot Government is actively assisting the Russian government in furthering human rights violations through assistance with politically motivated prosecutions, in contravention of its obligations under European Conventions. While there are many examples, the most recent one that exemplifies this situation best is the Magnitsky case and the Russian proceedings against Mr Browder, the head of the Global Magnitsky Justice movement. As you are probably aware, in 2008 Sergei Magnitsky uncovered a $230 million Russian government corruption scheme, exposed it and was then falsely arrested by some of the implicated officials, tortured and killed in the Russian Interior Ministry custody. The European Parliament along with many other European institutions has fought for the last eight years to get justice for Sergei Magnitsky. In 2014, this Parliament unanimously passed a resolution calling on the EU to sanction people involved in Mr Magnitsky’s arrest and killing and the corruption and money laundering that he had uncovered. We are surprised and disheartened to learn that since then: Cyprus has not conducted
    [Show full text]
  • Spring 2013 E Ngelen
    From Deauville to Cyprus B Y K LAUS C. E NGELEN hen the history of the euro area sovereign and bank debt crisis is written, the way the troika of The seeds of another Eurogroup finance ministers, the European Central Bank, and the International Monetary eurozone crisis have Fund managed the rescue of the outsized Cyprus offshore bank - been planted. ing center will be useful as a case study to document the Wextremely fragile state of European monetary union at that point in time. The handling of the crisis puts big question marks around the June 2012 EU summit council resolution to transfer banking supervision to the European Central Bank—to a European institution acting as the euro area’s financier of first resort for banks that lack access to market funding. This huge conflict of interest between supervising and funding large and small eurozone zombie banks and pursuing monetary policies oriented toward price stability is ignored by Europe’s democrati - cally elected leaders. When they talk about “Chinese walls,” it is sheer nonsense—look at Cyprus. On April 18, 2013, Germany’s parliament passed the aid package for troubled Cyprus with a large majority—486 in favor THE MAGAZINE OF INTERNATIONAL ECONOMIC POLICY and 104 against. Under a decision by the German Constitutional 220 I Street, N.E., Suite 200 Court, the German legislature retains the right to vote on any new Washington, D.C. 20002 Phone: 202-861-0791 • Fax: 202-861-0790 www.international-economy.com Klaus C. Engelen is a contributing editor for both Handelsblatt [email protected] and TIE.
    [Show full text]
  • Hungary Country Report BTI 2018
    BTI 2018 Country Report Hungary This report is part of the Bertelsmann Stiftung’s Transformation Index (BTI) 2018. It covers the period from February 1, 2015 to January 31, 2017. The BTI assesses the transformation toward democracy and a market economy as well as the quality of political management in 129 countries. More on the BTI at http://www.bti-project.org. Please cite as follows: Bertelsmann Stiftung, BTI 2018 Country Report — Hungary. Gütersloh: Bertelsmann Stiftung, 2018. This work is licensed under a Creative Commons Attribution 4.0 International License. Contact Bertelsmann Stiftung Carl-Bertelsmann-Strasse 256 33111 Gütersloh Germany Sabine Donner Phone +49 5241 81 81501 [email protected] Hauke Hartmann Phone +49 5241 81 81389 [email protected] Robert Schwarz Phone +49 5241 81 81402 [email protected] Sabine Steinkamp Phone +49 5241 81 81507 [email protected] BTI 2018 | Hungary 3 Key Indicators Population M 9.8 HDI 0.836 GDP p.c., PPP $ 26681 Pop. growth1 % p.a. -0.3 HDI rank of 188 43 Gini Index 30.9 Life expectancy years 76.0 UN Education Index 0.854 Poverty3 % 1.0 Urban population % 71.7 Gender inequality2 0.252 Aid per capita $ - Sources (as of October 2017): The World Bank, World Development Indicators 2017 | UNDP, Human Development Report 2016. Footnotes: (1) Average annual growth rate. (2) Gender Inequality Index (GII). (3) Percentage of population living on less than $3.20 a day at 2011 international prices. Executive Summary Although leaders of hybrid regimes do not necessarily aim to dismantle the framework of democratic institutions in their country, they do seek to place constraints on liberal democracy.
    [Show full text]