Professor, Doctor of the Hungarian Academy of Sciences, Honorary University Professor, Corvinus University of Budapest thesis advisor, National University of Public Service, Department of Public Finances
Published in: Public Finance Quarterly 2016/4 (p. 431-441.)
SUMMARY: In the 20th century, Hungary suffered two previously unprecedented hyperinflations, as a consequence of the two world wars. We may rightly refer to the devastating effects of war with respect to their emergence, however, in both cases the country had to face severe economic and financial problems, although different in nature, which not only enhanced inflation, but at the same time encumbered the attempts made for mitigation and currency stabilisation. While the introduction of the pengő, as new currency, was preceded by huge territorial losses and population decline, as well as by the loss of national assets up to 85–90%, the introduction of the forint, as new currency, witnessed a country destroyed both economically and physically, and deprived of 40% of its national assets.
KEYWORDS: hyperinflation, stabilisation, change of political regime, monetary policy, trends in the purchasing power of the forint, expectations
JEL CODES: E31, E44, E5, E52, E58