2022. March 25. 14:30

Focus on new results of financial literacy research - The Latest 2022/1 Issue of the Public Finance Quarterly has been published

The focus of the new issue is on the new results of financial literacy research. From our focus studies, one can learn about the financial literacy of Hungarian teachers and the attitudes of young adults towards loans. In our dispute articles, one can read about the political-economic meaning and implications of the helicopter money and basic income propositions, as well as the difficulties in forecasting GDP in light of the COVID-19 pandemic. In our studies, those interested can read about the financing of agricultural pensions in European countries and also about the ambivalent changes in CDS spreads in certain euro-area countries. The practice regarding the disclosures of intellectual capital in India and the experience of equity-based crowdfunding in the UK will also be on the table in our latest issue. Our literature review follows the origins of taxation.


In their study Erzsébet Németh, Dániel Béres, Katalin Huzdik and Boglárka Deák-Zsótér analyse the financial literacy of teachers. The aim of the research is to explore the financial knowledge, attitudes, confidence, behavior and motivations of teachers (N = 752) teaching different subjects. The survey is particularly important because their knowledge, attitudes, and behaviors affect the financial awareness of the students they teach. The results indicate a higher level of financial literacy than assumed, revealing that teachers have a higher level of financial literacy than students in higher education. 86% of those surveyed have savings in addition to bank deposits, government bonds and other, more complex forms of savings, indicating a high level of financial awareness and involvement. Teachers highly value their own financial literacy and likewise those studying in higher education are risk averse. Their vast majority consider the development of financial literacy in schools important. Financial literacy trainings have a measurably positive effect on the level of knowledge of the participants. Based on the results of the research, it is worthwhile to shape the curricula and the system of requirements based on the financial awareness and motivation of the teachers.

Dániel Béres and Katalin Huzdik aim to examine the attitude of young adults (18-25 years) towards bank loans.  For the analysis the authors use two primary data sources (financial literacy surveys were executed in 2013 and 2020) and find that the attitude of young adults towards the loans is negative. Between the 2013 and 2020 surveys the economic cycle showed prosperity. As a result, the respondents devalued the importance of the loans in the economy. Besides, the extreme rejection of having a bank loan was also mitigated. As for the bank loan experiences of the respondents it was found that the purposes of the borrowed loans are along the good criteria of financial literacy – the spendings examined can be considered as an investment for the future. Regarding the satisfaction level of the respondents with the bank loans the most important satisfactory factor was the expectations for the future. The measures taken after 2008 financial crisis such as re-defining consumer friendly lending and executing population supporting policy involving credit institutions resulted a mild positive effect on the attitude of the young adults towards bank loans. Risk avoidance results a trap situation that is against financial inclusion and results disequilibrium in demand and supply of banking services. The effect of the so called ‘risk mitigation trap’ can be reduced by developing the financial literacy.


Following the coronavirus outbreak, and especially before inflation became a key factor in this period, several crisis management proposals have raised the possibility of a universal basic income, which could be backed by central bank money creation. Bálint Tamás Vargha seeks to capture the political economy meaning and implications of the propositions relating to helicopter money and basic income. This proposal, presented as a fundamentally distributive issue, must be observed in the historical context of value, work and money creation. Helicopter money appears in this light as a new paradigm of extensive growth, which at first glance appears to be a financial innovation, but paradoxically bears a relationship with a more pre-capitalist conception of value. Moreover, helicopter money is a wage-substitute transfer that does not respond to the social and symbolic void of the workplace. It appears as a social instrument, while it can only rest on the global division of production and consumption. Helicopter money is a continuation of quantitative easing by other means, which unveils the motives for money creation. It is an overture to the thought experiments of ‘value without work’ and ‘economy without people’.

In his dispute article Antal István Magas analyzes why was it extremely difficult to forecast GDP worldwide, especially in the years of 2020-2021. The author finds that it was mainly due to a double shock hit both aggregate demand and supply sides, it had substantially changed the known behavior of key participants. Reactions of households and firms became largely unpredictable. The IMF projections of April 2020 had to be revised sharply. It appears the world economy could recover from the biggest output drop since World War II only with the help of extensive public spending schemes. The author also contemplates if one can speak of a new wave of Keynesian policies. How long this present overwhelmingly lose fiscal and monetary stance can last? One cannot tell. There are visible threats, for instance in the inflationary environment. 


András Giday and Tibor Tatay in their study present the financing of agricultural pensions in certain European countries. Supporting agriculture in Europe is important for many reasons. On the one hand, to secure food supplies, and on the other, to ensure the sustainability of rural lifestyles. But in recent decades, rural populations have also been affected by population ageing. Different agricultural pension schemes have been set up in European countries, taking into account the specificities of the agricultural sector. The authors found that pension funds have tended to be more important where the role of small farms was significant and the pension system was of the full Bismarckian type. In general, they were not introduced where a "kolkhoz system" existed in East-Central Europe before 1990. In the study the authors look at the different forms that have been implemented and review the changes that have taken place in recent decades and found that in some countries, states have supplemented contributions to pension payments by up to 75-85%. The presented methodology is document analysis and comparative assessment. The study argue that it is worthwhile to encourage farmers to continue production on smaller farms by providing special sectoral support and career funding, such as pensions, to meet social and environmental objectives.

László Török analyses the ambivalent change in CDS spreads in 11 Eurozone countries. One of the macroeconomic consequences of the COVID-19 epidemic is that the global economy has seen a robust increase in the countries' gross external debt and the sovereign public debt that is part of it. The increase in gross external debt and sovereign government debt also means that it has become theoretically riskier for investors to buy debt securities (typically bonds). Theoretically, however, it follows that as a result of the increase in risks in the country, CDS spreads had to rise as well. The study uses a correlation calculation to show that the development of the price of CDSs is more closely correlated with gross government debt than with gross external debt. Using hierarchical cluster analysis, the study groups the countries of the Eurozone. The basis for clustering is the close relationship between a country's gross government debt and its CDS spread over the period under review. A relevant conclusion of the study is that the increase in gross government debt was not followed by an increase in CDS spreads because the financial source of the increase in government debt was different from previous years.

Soumya Singhal, Seema Gupta and Vijay Kumar Gupta present the disclosure of intellectual capital based on evidence from Indian Annual Reports. The shifting of the economy from manufacturing-based to knowledge-based has raised the importance of Intellectual Capital (IC) in the business value creation process. Although IC has been recognized in integrated reports, limited information about it is still reported in traditional financial disclosures. The present study examines the extent of intellectual capital disclosure (ICD) in Indian firms and assesses the gap between stakeholder expectations and industry disclosure procedures. For this purpose, content analysis has been performed on a sample of 30 non-financial firms listed on the Bombay Stock Exchange (BSE) for the year 2019-2020 by constructing a disclosure index of 42 items based on previous studies, under the three categories of IC, namely, structural capital, relational capital, and human capital. The results reveal that the overall disclosure of intellectual capital by Indian firms is low. The companies disclose only 42% of the Intellectual Capital items. Further, it is found that maximum number of companies are disclosing structural capital, while human capital disclosure obtains the minimum score. The results imply the need to develop a proper framework for reporting intangibles in the annual statements of organizations in India.

The study of Virginia Kirigo Wachira and Esther Wanjiru Wachira aimes to explore what influences the amount of money raised which can either lead to the success or failure of equity-based crowdfunding using Crowdcube. The study uses Pearson correlations and multiple regression analysis. The regression model is considered a good fit as it was statistically significant. The findings of the paper reveal that the number of investors, target amount, and pre-money valuation strongly and positively influence the success of equity-based crowdfunding campaigns. Additionally, equity, display of share price information, and online social media presence are other factors that influence the success of equity-based crowdfunding campaigns. However, previous crowdfunding history was negatively associated with the success of campaigns. The uniqueness of the study will benefit investors and founders who aim at running or investing in successful equity-based crowdfunding campaigns in the UK and globally. The study recommends further research using other equity-based crowdfunding platforms in different countries and continents.

The studies published in this issue can be viewed and downloaded at the following link