Hungarian Scholars Visit IES

András Inotai, Director of the Institute for World Economics of the Hungarian Academy of Sciences, along with his colleague, Deputy Dean and Associate Professor Ivanka Petkova, spoke to IES researchers on the global financial crisis and other related issues on June 17, 2010. They were in Beijing for an academic visit.

Ivanka Petkova is Board of Trustees Chairperson of the Economic Policy Institute, a non governmental organization based in Sofia dealing with EU issues and organizing seminars for young public servants from South Eastern Europe.

The Institute for World Economics was established in 1973. Its predecessor, the Afro-Asian Research Centre, was founded in 1965. According to the web of the institute, it conducts independent theoretical and applied research in response to global and regional challenges, problems and trends that call for changes in international cooperation and domestic policy.

Inotai said at the lecture that the global financial crisis was caused by over-production as well as a lack of effective regulation of the financial system.  Petkova believed that over-securitization of credit was not the major cause of the crisis as financial innovation should be encouraged.

With regard to the question of the impact of Euro devaluation on Chinese exports to Europe, the two Hungarian professors said that the answer to this question depends on if the Chinese currency is really undervalued or not. They said that, if RMB is undervalued for 20% and Euro is now devalued for 20%, there would be no negative impact at all on China’s competitiveness.

Inotai and Petkova said that, in order to correct the shortcomings of the fiscal policies in the EU, it is likely that the EU would probably try to establish a certain kind of European economic governance. Moreover, a mechanism of fiscal transfer might be set up in the EU, meaning that a big amount of the GDP should be transferred to the EU.