nep-tra New Economics Papers
on Transition Economics
Issue of 2009‒04‒05
nineteen papers chosen by
J. David Brown
Heriot-Watt University

  1. Mortality in Russia: Microanalysis By Irina Denisova
  2. Financial Convergence in the New EU Member States By Kalin Hristov; Rossen Rozenov
  3. Financial constraints in China: firm-level evidence By Poncet, Sandra; Steingress, Walter; VANDENBUSSCHE, Hylke
  4. Interest rate transmission mechanism of the monetary policy in the selected EMU candidate countries (SVAR approach) By Mirdala, Rajmund
  5. Urban Trends and Policy in China By Lamia Kamal-Chaoui; Edward Leeman; Zhang Rufei
  6. The „Chinese style reforms” and the Hungarian „Goulash Communism” By Maria Csanadi
  7. Migration and Commuting Propensity in the New EU Member States By Michael Landesmann; Leon Podkaminer; Roman Römisch; Sebastian Leitner; Hermine Vidovic
  8. Does Migration Help Reducing Inequality and social Exclusion? By Marilena Giannetti; Daniela Federici; Michele Raitano
  9. Assessing the vulnerability of emerging Asia to external demand shocks: the role of China By Daniela Marconi; Laura Painelli
  10. The effect of oil price shocks on the Czech economy By Kamil Dybczak; David Vonka; Nico van der Windt
  11. China's financial conundrum and global imbalances By Ronald McKinnon; Gunther Schnabl
  12. Einige quantitative Überlegungen zum EU-Budget By Tausch, Arno
  13. Global crisis and its implications on the political transformation in China By Maria Csanadi; Hairong Lai; Ferenc Gyuris
  14. IS U.S. MONEY CAUSING CHINA'S OUTPUT? By Johansson, Anders C.
  15. Trade, Institutions and Export Specialization By Karen Crabbé; Michel Beine
  16. Aligning at ISO 9001 requirements - a true challange for Romanian SMEs By Hmelnitchi, Carmen; Neamtu, Ion
  17. Brain Drain and Brain Return: Theory and Application to Eastern-Western Europe By Karin Mayr; Giovanni Peri
  18. A forewarning indicator system for financial crises: the case of six Central and Eastern European countries By Irène Andreou; Gilles Dufrénot; Alain Sand-Zantman; Aleksandra Zdzienicka-Durand
  19. Hungarian Pension System and its Reform By András Simonovits

  1. By: Irina Denisova (Center for Economic and Financial Research (CEFIR), Moscow)
    Abstract: The paper studies determinants of Russian adult mortality controlling for individual and household heterogeneity. We utilize twelve rounds of the Russian Longitudinal Monitoring Survey spanning the period of 14 years to study determinants of adult mortality. Survival analysis is the main methodology employed. The results are original in several respects. We find empirical support to the importance of relative status measured in non-income terms in shaping mortality hazards while income-measured relative position is confirmed to be statistically insignificant. We find evidence on the influence of labor market behavior, and sectoral and occupational mobility in particular, on longevity. The health detrimental role of smoking is found to be comparable to the role of excess alcohol consumption which is novel in the Russian context where the influence of smoking is downplayed in comparison to the alcoholism. Finally, we find no micro evidence in support to the regional data result underlying Treisman (2008) political economy story.
    Keywords: Mortality, Relative Deprivation, Survival Analysis, Transition, Russia
    JEL: J1 J10 J18 I1 I12 D31
    Date: 2009–03
  2. By: Kalin Hristov; Rossen Rozenov
    Abstract: In this paper we explore the issue of financial convergence in the new EU member states (NMS). For the purposes of our analysis the countries falling into the category NMS are Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia, i.e. all countries that joined the EU in the last decade, except Cyprus and Malta.
    Date: 2009
  3. By: Poncet, Sandra; Steingress, Walter; VANDENBUSSCHE, Hylke (UniversitŽ catholique de Louvain (UCL). Center for Operations Research and Econometrics (CORE))
    Abstract: This paper uses a unique micro-level data-set on Chinese firms to test for the existence of a "political-pecking order" in the allocation of credit. Our findings are threefold. Firstly, private Chinese firms are credit constrained while State-owned firms and foreign-owned firms in China are not; Secondly, the geographical and sectoral presence of foreign capital alleviates credit constraints faced by private Chinese firms. Thirdly, geographical and sectoral presence of state firms aggravates financial constraints for private Chinese firms (Òcrowding outÓ). Therefore it seems that ongoing restructuring of the state-owned sector and further liberalization of foreign capital inflows in China can help to circumvent financial constraints and can boost the investment of private firms.
    Keywords: investment-cashflow sensitivity, China, firm level data, foreign direct investment.
    JEL: E22 G32
    Date: 2008–12
  4. By: Mirdala, Rajmund
    Abstract: The stable macroeconomic environment, as one of the primary objectives of the Visegrad countries in the 1990s, was partially supported by the exchange rate policy. Fixed exchange rate systems within gradually widen bands (Czech republic, Slovak republic) and crawling peg system (Hungary, Poland) were replaced by the managed floating in the Czech republic (May 1997), Poland (April 2000), Slovak republic (October 1998) and fixed exchange rate to euro with broad band in Hungary (October 2001). Higher macroeconomic and banking sector stability allowed countries from the Visegrad group to implement the monetary policy strategy based on the interest rate transmission mechanism. Continuous harmonization of the monetary policy framework (with the monetary policy of the ECB) and the increasing sensitivity of the economy agents to the interest rates changes allowed the central banks from the Visegrad countries to implement monetary policy strategy based on the key interest rates determination. In the paper we analyze the impact of the central banks’ monetary policy in the Visegrad countries on the selected macroeconomic variables in the period 1999-2008 implementing SVAR (structural vector autoregression) approach. We expect that the higher sensitivity of the selected macroeconomic indicators of the EMÚ candidate countries to the national monetary policy shocks would indicate the higher exposure of the selected countries to the ECB monetary policy impulses after the euro adoption in the future.
    Keywords: monetary policy; short-term interest rates; structural vector autoregression; variance decomposition; impulse-response function
    JEL: C32 E52
    Date: 2009–02
  5. By: Lamia Kamal-Chaoui; Edward Leeman; Zhang Rufei
    Abstract: China has become the world’s largest urban nation, with over 600 million urban citizens today. Projections indicate that this level may reach 900 million in 2030. The way this urbanisation process is managed will have important policy implications for China and beyond. This paper provides an introduction to urban trends and policies in China. It describes urban growth trends, where and in what kinds of cities growth is occurring, how China’s cities are governed, and how public policy has influenced the extent, pace, and spatial distribution of urbanisation. As China continues to integrate with the globalising economy, its competitiveness will increasingly be driven by the capacities of its metropolitan regions to improve the productivity of enterprises in ever-widening supply chains. The report concludes with a description of some of the key policy challenges facing central and local urban governments in this global context, including: 1) institutional constraints to markets and factor mobility; 2) environmental challenges; 3) ensuring equity and helping vulnerable groups; and 4) metropolitan governance.
    Date: 2009–03–25
  6. By: Maria Csanadi (Institute of Economics - Hungarian Academy of Sciences)
    Abstract: Similarities and differences will be demonstrated between Chinese and Hungarian party-state systems. We define the role of reforms in the self-reproduction of both party-states. We shall demonstrate how different patterns of power distribution lead to the implementation of different reforms. We shall describe how these different reforms have created the Hungarian “Goulash communism” and the “Chinese style” reforms. We shall also explain the conditions that have lead “Goulash communism” to political transformation first in Hungary accompanied by economic crisis, and “Chinese style reforms” to economic transformation first in China, accompanied by macroeconomic growth.
    Keywords: reforms, transformation, party-state systems, goulash communism, Chinese style reforms
    JEL: B52 D85 N10 P2 P3 P41 P52
    Date: 2009–03
  7. By: Michael Landesmann (The Vienna Institute for International Economic Studies, wiiw); Leon Podkaminer (The Vienna Institute for International Economic Studies, wiiw); Roman Römisch (The Vienna Institute for International Economic Studies, wiiw); Sebastian Leitner (The Vienna Institute for International Economic Studies, wiiw); Hermine Vidovic (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: This study provides an overview of economic and labour market developments in the new EU member states of Central and Eastern Europe over the past several years. In addition, it presents the experiences that have been collected with regard to migration flows between the 'old' and the 'new' member countries of the European Union. Against this background an assessment is made of the characteristics, features and impacts of migration flows that may emerge from a further liberalization of labour market access over the period 2009-2011.
    Keywords: labour market, migration, regions
    JEL: J21 J61 R23
    Date: 2008–12
  8. By: Marilena Giannetti; Daniela Federici; Michele Raitano
    Abstract: The impact of remittance flows on growth and income distribution has attracted a great deal of attention, but the theoretical and empirical literature on the relationship between remittances and economic development is far from clear. Although there is wide consensus that foreign remittances can help receiving households to increase income, consumption and capabilities to face socioeconomic shocks, there has been little quantitative research on impacts of remittances on household welfare and poverty. Our paper seeks to fill some of these gaps and it proposes an empirical analysis of the role of remittances as tool for reducing inequality and covering households against poverty and social exclusion risks. The empirical analysis focuses on four Eastern European Countries: Slovenia, Poland, the Czech Republic and Hungary, and is based on the EU-SILC 2005 data-set, that for each household provides information regarding interhousehold cash transfers received amongst which, regular cash support from households in other countries (i.e. remittances) are included.
    Keywords: Remittances, inequality, poverty.
    JEL: O10 O15 O52
    Date: 2009–02
  9. By: Daniela Marconi (Bank of Italy); Laura Painelli (Bank of Italy)
    Abstract: The paper assesses the vulnerability of China to external shocks via the indirect negative effect of a slow-down in exports on domestic demand for investment. In the last decade China has increased its dependence on external demand, particularly from the advanced countries; at the same time it has become a primary destination market for goods produced in the rest of emerging Asia. Since 2001 investment expenditures have represented a key driver of Chinese GDP growth; as a very large share of activity in the manufacturing sector is export oriented, we expect fixed capital investment in this sector to be highly related to exports. Overcoming serious shortcomings in available data, we estimate an investment equation for the period 1993-2006 and find an elasticity of investment to exports in the manufacturing sector in the range between 0.9 and 1. Taking into account the dominant contribution of capital accumulation to Chinese GDP growth, we conclude that the growth effects of an external demand shock could become significant when taking into account the domestic investment channel.
    Keywords: exports, investment, elasticity
    JEL: F14 E22 N6
    Date: 2009–02
  10. By: Kamil Dybczak; David Vonka; Nico van der Windt
    Abstract: In the course of 2002 up to the end of 2007, very steep growth of oil prices, but no remarkable slowdown of either the world economy or the Czech economy, was observed. This phenomenon raises a question about the impact of oil prices on modern economies. Analyzing the available data we can conclude that notwithstanding the full dependence of the Czech economy on oil imports, its overall dependence on imported energy sources is relatively low. Compared to the EU15 level the energy intensity of the Czech economy is quite high. Nevertheless, further improvements in this area are expected. Furthermore, the appreciation of CZK and the set-up of the tax system significantly reduced the volatility of the consumer oil price between 2002 and 2007. Using a structural CGE model we quantify the impact of oil price changes on the Czech economy and demonstrate that it is not dramatic despite the oil price turmoil in the years 2000 to the end of 2007. We find that a 20% increase in the CZK oil price tends to decrease the GDP level by 1:5% and 0:8% in the short and long run, respectively. Short-run annual GDP growth decreases by 0:3 p.p. Concerning prices, inflation would accelerate by around 0:4 p.p. per annum in the short run.
    Keywords: CGE, Czech Republic, oil price.
    JEL: C68 Q43
    Date: 2008–12
  11. By: Ronald McKinnon; Gunther Schnabl
    Abstract: China's financial conundrum arises from two sources: (1) its large trade (saving) surplus results in a currency mismatch because it is an immature creditor that cannot lend in its own currency. Instead foreign currency claims (largely dollars) build up within domestic financial institutions. And (2), economists - both American and Chinese - mistakenly attribute the surpluses to an undervalued renminbi. To placate the United States, the result is a gradual appreciation of the renminbi against the dollar of 6 percent or more per year. This predictable appreciation since 2004, and the fall in US interest rates since mid 2007, not only attracts hot money inflows but inhibits private capital outflows from financing (compensating?) China's huge trade surplus. This one-way bet in the foreign exchange markets can no longer be offset by relatively low interest rates in China compared to the United States, as had been the case in 2005-06. Thus, the People's Bank of China (PBC) now must intervene heavily to prevent the renminbi from ratcheting upwards - and so becomes the country's sole international financial intermediary. Despite massive efforts by the PBC to sterilise the monetary consequences of the reserve buildup, inflation in China is increasing, with excess liquidity that spills over into the world economy. China has been transformed from a deflationary force on American and European price levels into an inflationary one. Because of the currency mismatch, floating the RMB is neither feasible nor desirable - and a higher RMB would not reduce China's trade surplus. Instead, monetary control and normal private-sector finance for the trade surplus require a return to a credibly fixed nominal yuan/dollar rate similar to that which existed between 1995 and 2004. But for any newly reset yuan/dollar rate to be credible as a monetary anchor, foreign "China bashing" to get the RMB up must end. Currency stabilisation would allow the PBC to regain monetary control and quash inflation. Only then can the Chinese government take decisive steps to reduce the trade (saving) surplus by tax cuts, increased social expenditures, and higher dividend payouts. But as long as the economy remains overheated, the government hesitates to take these trade-surplus-reducing measures because of their near-term inflationary consequences. This is part of a series of BIS Working Papers (273 to 278) collecting papers presented at the BIS's Seventh Annual Conference on "Whither monetary policy? Monetary policy challenges in the decade ahead" in Luzern, Switzerland, on 26-27 June 2008. The event brought together senior representatives of central banks and academic institutions to exchange views on this topic. BIS Paper 45 contains the opening address of William R White (BIS), the contributions of the policy panel on "Beyond price stability - the challenges ahead" and speeches by Edmund Phelps (Columbia University) and Martin Wolf (Financial Times). The participants in the policy panel discussion chaired by Malcolm D Knight (BIS) were Martin Feldstein (Harvard University), Stanley Fischer (Bank of Israel), Mark Carney (Bank of Canada) and Jean-Pierre Landau (Banque de France). This Working Paper includes comments by Michael Mussa.
    Keywords: Global Imbalances, Chinese Exchange Rate Regime
    Date: 2009–03
  12. By: Tausch, Arno
    Abstract: The present analysis deals with the relationship of the EU budget and its resources with the Lisbon process. The EU Commission speaks for many years about a lack of transparency in financial relations between Member States and the EU. It even says that the current system fulfils very well the criteria of sufficiency and stability, but clearly not the criterion of visibility and simplicity, and not the criterion of a balanced allocation of economic resources in the EU. The fundamental question is then: how effective are all those billions paid out by the Commission for the Lisbon process in the individual Member States? The "net contributors" • Finland • Denmark • Austria • Belgium • Sweden • Italy • Great Britain • Netherlands • France • Germany already paid a sum total of over 73 billion Euros [€ 73452.5] over the time period of 2003 to 2007, in return states such as Spain, Greece, Portugal, Poland and Ireland cumulated over the period, far more than € 5 billion, with Spain (27.0 billion €), Greece (16.5 billion €), and Portugal (11.3 € billion) being the largest recipients. Although it is true that in the EU-27 countries with a low purchasing power receive more than rich countries, redistribution is relatively weak, and especially many semi-rich states - such as Greece - will continue to receive large sums from the EU budget. Clearly, this is a very huge revenue problem. We apply regression analysis to measure this “revenue problem”: Rich countries above the regression line of “pure distributive justice”, based on purchasing power per capita • Luxembourg • Ireland Rich states below the regression line • Netherlands • Germany • France • Italy • Sweden • Belgium • Denmark • Finland • Great Britain Poor countries above the regression line • Poland • Bulgaria • Hungary • Latvia • Portugal • Malta • Lithuania • Greece Poor states below the regression line • Romania • Czech Republic • Slovenia • Slovak Republic Our analysis shows that over time the weight of the "revenue problem" shifted to the East of our continent. Net inflows should ideally have been used to lift poor countries out of poverty. We estimated the convergence performance and its efficiency with a simple multiple regression model [wealth increase in relation to the wealth level in the previous period (non-linear effects are allowed) and the net financial position in the previous period]. Our calculations show that 1. certainly net transfers enabled the convergence of purchasing power in Europe, but 2. there were substantial deviations of the convergence process 3. over time imbalances seem even to have strengthened The south of Europe, especially Portugal, Italy, and Hungary and Bulgaria do not succeed, and the Lisbon efficiency of the EU financial resources decreased in particular in Denmark, Great Britain, Hungary, Romania and Greece over time. Greece is seen as a specially problematic case because it is the highest net payments recipient during the last years. Our analysis is supplemented by considerations about how funds from the EU budget should be available for the convergence of poorer EU countries. There seems to be a "constancy of subsidies” even long after the reasons for the subsidy long ceased to exist. Ireland, for instance still received massive inflows for many years even after it became one of the richest EU countries. In our estimation equation, we allow for the fact that rich countries may grow faster than very poor countries. Our quantitative analysis shows in any case that with the "big bang" enlargement in May 2004 a first good start towards more convergence and regional redistribution of the resources of the EU budget was made, but that the good performance quickly dissipated again an net transfers again suffered an efficiency loss. The EU-27 returned to the old tendency that the very rich countries grow faster than the poorer countries. Overall, therefore, our findings suggest that convergence funding is far from sufficient to achieve a real convergence in living conditions in Europe. There is also a current "perverse correlation” between corruption and net inflows. Poor states in the Union would do well to carry out consistent anti-corruption policies if they want adequate funding to reduce poverty.
    Keywords: Economic integration; International Relations and International Political Economy
    JEL: F15 F5
    Date: 2009–03–24
  13. By: Maria Csanadi (Institute of Economics - Hungarian Academy of Sciences); Hairong Lai (Center for Comparative Politics and Economics - Beijing); Ferenc Gyuris (Department of Regional Science - Eötvös Loránd University, Budapest)
    Abstract: This paper analyzes the impact of global financial and economic crisis on the process of system transformation in China. First, it details the direct impact of global growth on macroeconomic development and its indirect impact on economic transformation. Second, it analyzes the direct impact of global crisis on macroeconomic decline and its indirect impact on the prospects of political transformation. The paper builds on the basic principles and ideas of the Interactive Party-State model to introduce the concept of transformation dynamics. This concept implies the direction and speed of change of the retreating party-state sphere and the emergence of the field outside of it during the process of transformation. Using this concept a statistical survey was carried out on the economic transformation of the Chinese party-state. Results reveal the disparities of the dynamics of transformation in time, in space, and at different levels of aggregation between 1999 and 2004. A dominant type of transformation dynamics is revealed during this period and the shift of dominant type within that period, sensitive to the trend of certain economic indicators. Based on those findings, the paper projects the dominance of another type of transformation dynamics as a result of the consequences of global crisis. It also outlines the possible impact of this dynamics on the premises of political transformation.
    Keywords: system transformation, China, economic transformation, political transformation, spatial disparities in system transformation
    JEL: B52 D85 N10 P2 P3 P41 P52
    Date: 2009–03
  14. By: Johansson, Anders C. (China Economic Research Center)
    Abstract: This paper tries to answer the long-standing question of whether money causes output. Instead of focusing on domestic monetary policy and output, we analyze U.S. monetary policy and its possible effects on real output in China. Our results indicate that U.S. money supply Granger causes China’s real output, but that an alternative monetary instrument, the Federal Fund Rate, does not. Furthermore, there is a significant cointegrating relationship between U.S. money and China’s output, which means that there is a long-run relationship between them. Impulse response functions and variance decompositions also support the results, showing that shocks in the U.S. money supply have an effect on China’s real output. The results have important implications for policy makers in China that focus on maintaining a high and stable economic growth. They also have implications for U.S. policy makers. A number of countries around the world still fix their currencies against the U.S. dollar, which means that U.S. monetary policy has effects not only domestically but also in these countries.
    Keywords: China; United States; Monetary policy; Output; Causality; VECM
    JEL: C32 E40 E51 E52 E58
    Date: 2009–03–15
  15. By: Karen Crabbé; Michel Beine
    Abstract: This paper studies whether trade integration between the EU15 and Central Europe has led to more export specialization in Central Europe. Moreover, we analyze the impact of institutional reforms in Central Europe on export specialization. The empirical analysis is set up for thirteen Central European countries over the period 1989-2000. Our results indicate that a reduction in tariffs between EU15 and Central Europe led to increased export specialization in Central Europe. In addition to trade integration, we show that institutional reforms and in particular enterprise reforms contributed to export specialization.
    Keywords: trade integration, tariffs, Herfindahl index, exports, institutions
    JEL: F14 F15 R12
    Date: 2009
  16. By: Hmelnitchi, Carmen; Neamtu, Ion
    Abstract: Beginning with ’90 years in Romania have been created more and more private enterprises, which today form a consistent sector of so called “small and mid-sized enterprises” (SMEs). Focusing on profit and being in favorable conditions with a high market require, the SMEs not always pay attention at the quality of their delivered products and services. Adhering at European Union, in 2007, brought both the internationalizing of Romanian market, but also the higher constrains regarding quality of delivered products and services. So, it’s easy to understand why the SMEs begin to think at designing and implementing of an efficient quality management system. The issue presents some conclusions of my research achieved (between Oct. 2007 – Feb. 2008) in the frame of 70 Romanian SMEs.
    Keywords: SME; management; system; quality; standard; challange
    JEL: D21 F00 F0 O2 F2 D60 L15
    Date: 2009–04–01
  17. By: Karin Mayr (Johannes Kepler University, Linz); Giovanni Peri (University of California, Davis, CESifo and NBER)
    Abstract: Recent empirical evidence seems to show that temporary migration is a widespread phenomenon, especially among highly skilled workers who return to their countries of origin when these begin to grow. This paper develops a simple, tractable overlapping generations model that provides a rationale for return migration and predicts who will migrate and who returns among agents with heterogeneous abilities. The model also incorporates the interaction between the migration decision and schooling: the possibility of migrating, albeit temporarily, to a country with high returns to skills produces positive schooling incentive effects. We use parameter values from the literature and data on return migration to simulate the model for the Eastern-Western European case. We then quantify the effects that increased openness (to migrants) would have on human capital and wages in Eastern Europe. We find that, for plausible values of the parameters, the possibility of return migration combined with the education incentive channel reverses the brain drain into a significant brain gain for Eastern Europe.
    Date: 2009–04
  18. By: Irène Andreou (GATE - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines); Gilles Dufrénot (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales - CNRS : UMR6579); Alain Sand-Zantman (GATE - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines); Aleksandra Zdzienicka-Durand (GATE - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines)
    Abstract: We propose a measure of the probability of crises associated with an aggregate indicator, where the percentage of false alarms and the proportion of missed signals can be combined to give an appreciation of the vulnerability of an economy. In this perspective, the important issue is not only to determine whether a system produces true predictions of a crisis, but also whether there are forewarning signs of a forthcoming crisis prior to its actual occurrence. To this end, we adopt the approach initiated by Kaminsky, Lizondo and Reinhart (1998), analyzing each indicator and calculating each threshold separately. We depart from this approach in that each country is also analyzed separately, permitting the creation of a more “custom-made” early warning system for each one.
    Keywords: Currency Crisis; Early Warning System; Composite Indicator; Eastern Europe
    Date: 2009
  19. By: András Simonovits (Institute of Economics - Hungarian Academy of Sciences)
    Abstract: The goal of this study is to present an insider view on the pension reforms implemented in Hungary between 1996 and 2009. Both political economy as well as institutional economics will be used as the main approaches to analyse and explain the reform process and some of its effects. The following studies provide valuable insights: Palacios and Rocha (1998), Bokros and Dethier eds. (1998), Augusztinovics (1999), Augusztinovics et al. (2002), Simonovits (1999), (2000), (2008a), Czúcz and Pintér (2002), European Commission (2006), Gál (2006), Impavido and Rocha (2006), and Guardiancich (2008). The structure of the paper is as follows: Section 1 considers the legacy of the pension system. Section 2 summarises the debate on the pension reform and the basic decisions. Section 3 outlines the implementation of the pension reform, while Section 4 discusses the implementation problems. Section 5 describes the changes since the reform, while Section 6 analyses and Section 7 evaluates the reform. An Appendix discusses the issues of contribution rates.
    Keywords: Hungary, pension reform, social security, private pension
    JEL: H55 J14 J26 J32
    Date: 2009–03

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