CEU Electronic Theses and Dissertations, 2019
| Author | Nemes, Alexandra |
|---|---|
| Title | A Macro-Financial Theory of Hungary's CSOK |
| Summary | This thesis examines the effect of a recently introduced Hungarian public policy, the family housing benefit (the so-called CSOK) on the Hungarian credit and housing market. Using a DSGE model similar to Forlati & Lambertini (2011), it focuses on the interaction between the two actors in this economy, lenders and borrowers, and estimates the effect of CSOK on key housing market variables, while compares these results to a theoretical setting in which CSOK has not been initiated. By doing so, this model predicts the reaction of the Hungarian credit and housing market to exogenous shocks with and without this policy change. The main findings show that CSOK amplifies the reactions of the housing market variables, thus the mortgage market becomes riskier, house prices fall deeper, borrowers decrease their housing stock and consumption, while a larger share of borrowers lose their houses because they default on their mortgages. These results have a crucial policy implication: given that CSOK makes the Hungarian credit and housing market more volatile, a potential global crisis would leave the Hungarian markets in a more vulnerable situation, making the country’s economy more exposed to the negative effects of any exogenous crisis. |
| Supervisor | Rots, Eyno |
| Department | Economics MA |
| Full text | https://www.etd.ceu.edu/2019/nemes_alexandra.pdf |
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