Inflation Rather Than Austerity - Hungary’s Economic Strategy

Since 1968, subsequent Hungarian governments have been less resilient to moderate inflation than others in the region. After the 1989-1990 market transition, inflation targeting became an even more important short-term policy tool. Since hyper-inflation was not allowed to gain momentum, there was no need to resort to fully-fledged currency reform. Instead, Hungarian governments have been ready to accept extra-inflation as an unavoidable price for reducing the fiscal deficit, choosing against Maastricht inflation targeting and economic coordination with Brussels.

Read CASE Network E-brief 03/2011 "Inflation Rather Than Austerity - Hungary’s Economic Strategy" by Peter Mihályi.