The National Bank of Hungary released the March issue of its Financial and Economic Review, featuring studies by Hungarian and international authors on attitudes to the green transition, how trust in euro area institutions evolved during the Covid-19 pandemic, the growth effects associated with EU accession, and the analytical implications of treating money supply as endogenous. The issue also includes essays on Hungary’s policy challenges for innovation-driven growth and on the 2024 Nobel Memorial Prize in Economic Sciences laureates, alongside a feature article on artificial intelligence and the labour market. Research on climate policy in emerging markets finds that concern about climate change does not necessarily translate into willingness to pay, which is more likely among those who expect to be better off in the future, are more patient and trust the government, and where policies are framed as subsidies rather than more salient tax increases. A study using the European Central Bank as an example shows trust in central banks fell during the pandemic, but in line with broader declines in trust across institutions, with findings highlighting co-movements in institutional trust and distinct dynamics among extremist groups. On EU enlargement, a paper estimates EU-10 GDP per capita rose from 32% of Germany’s level in 2003 to 55% in 2023, with almost three-quarters of the convergence attributed to an ‘EU accession bonus’ linked to export growth and supply chain integration. The endogenous money supply paper argues this approach reshapes conclusions for earlier frameworks including the relationship between central bank balance sheets and policy rates and several open-economy puzzles, while the innovation essay calls for innovation investment to rise to 3% of GDP in the medium term and emphasises the state’s role in the innovation ecosystem; the issue also contains a book review and four conference reports.
National Bank of Hungary 2025-03-31
National Bank of Hungary publishes March Financial and Economic Review covering climate policy support, institutional trust and the EU accession bonus
The National Bank of Hungary's March Financial and Economic Review covers the green transition, trust in euro area institutions during Covid-19, EU accession growth effects, and treating money supply as endogenous. It includes essays on Hungary’s innovation challenges and the 2024 Nobel Prize in Economic Sciences, focusing on AI and the labor market. Key findings emphasize framing climate policies as subsidies, declining trust in central banks during the pandemic, and significant GDP convergence of EU-10 countries with Germany since 2003.