Successful Crisis Management in the Light of the Twelve Economic Turnarounds

Matolcsy, György (2019) Successful Crisis Management in the Light of the Twelve Economic Turnarounds. POLGÁRI SZEMLE: GAZDASÁGI ÉS TÁRSADALMI FOLYÓIRAT, 15 (Spec). pp. 13-43. ISSN 1786-6553

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Abstract

In 2019, now more than a decade after the global economic crisis of 2008–2009, it is appropriate to look back on the events of the period, which was one with a major bearing on economic history. The complex challenges emerging in the aftermath of the global economic crisis and the answers given to them remain fundamental determinants of our daily lives to this day. Moreover, as on a number of occasions in the course of history, the economic crisis also challenged the dominant trends in connection with the development of economics as a science. The very first and perhaps the most important reference point in the debates was the way in which to manage the crisis. According to neoliberalism, the former predominant school of economic thought, short-term salvation could be found by supply-side reforms causing demand to decline, a view which was increasingly challenged over time by economists seeking a broad distribution of Keynesian economic stimulus and the burdens of reform. Hungary is a country where this debate and its consequences have been quite spectacular. Due to the flawed economic policy pursued before the crisis, the global storm of 2008–2009 hit an extremely weakened Hungary. As a result of that and the flawed crisis management based on neoliberal foundations that predominated the period, Hungary suffered one of the worst crises seen in Europe up to 2010. In the aftermath of the severe damage, the civic government entering office in 2010 announced a new approach to crisis management. Building on coordination between branches of economic policy, the strategy adopting a combination of innovative, conventional and unconventional measures successfully stabilised Hungary, setting the country on a new path of convergence. This paper provides an overview of the most important steps and achievements of that crisis management.

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