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Hungry Economic Crisis

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Submitted By dennisdemuinda
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Introduction

The Hungarian economic crisis can be ascribed to changes in economic situation in particularly fiscal and monetary policies of the country, although the effect of the global financial crisis in 2008 cannot be taken too lightly. Hungary’s desire to become a member of the European Union required the country to embark upon “austerity measures” which further dampened its economic situation. Adoption of the shift to the right ideologies further deteriorate the Hungarian economic situation.
Prior to the economic crisis of Hungary that appeared back in 1989, which saw a fall in standard of living and economic activity due to economic trade liberalization, the country had transformed from monarchy, communist and socialist economic systems consecutively. In the period 1867 to 1920 Hungary operated under a monarchy government and this ended in a planned and or command economic system. After the invasion and seizure by the Soviet Union, the country’s economic policies were transformed to communist economic system resulting in nationalization of the country’s industries and institution of collective agriculture. After the collapse of the USSR which it had ties with Hungry experienced a transition from a communist to a socialist economy through liberalization of economic policies which brought about foreign investment though contrary to expectations it had negative impact in the economy.
The Hungarian State was forced into the economic crisis because of rapid transition from communism to socialism by adopting economic liberalization policies, the hard hit global financial crisis, implementation of the EU austerity measures, government overspending that culminated high budget deficit and the shift to the right which opened door for the Fidesz government that brought about not well deliberated fiscal, monetary. The main aim of this paper is to discuss the

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