Péter Horváth

Essays on the nonlinear transmission of monetary policy

How Grant Design Shapes Investment, Output and Productivity in Europe Co-authored with Laurent Maurin and Atanas Kolev Abstract: This paper investigates the impact of government grants on investments, output and productivity across the EU. We use Bayesian Vector Autoregressions identified with long-run restrictions to disentangle two types of grant shocks: generic and targeted. We find that well targeted grants that raise productivity permanently translate into larger gains in output and investments as well. The permanent increase in productivity is primarily fuelled by such grants being allocated to more productive investments, such as intellectual property products, while generic support grants are more likely to be allocated to replenish physical capital. The magnitude of the responses appears to be heterogenous across European economies in our sample. EIB Investment Survey information suggests that this heterogeneity is driven by firms facing different economic and regulatory conditions.

Monetary Transmission in a fragmented uncertain world Co-authored with Tohid Atashbar Abstract: In this paper, we investigate the nonlinear relationship between economic uncertainty and the monetary transmission mechanism. We use a Threshold Vector Autoregression model and impose sign-restrictions on quarterly interest rates, GDP growth, and CPI inflation across a broad range of countries. Our findings suggest that during periods of elevated uncertainty, monetary shocks lead to more profound economic contractions, followed by sluggish output adjustments. The effectiveness in curbing inflation exhibits mixed results contingent on the underlying uncertainty narrative. Nonetheless, the overarching trend in our results tends to support the notion that heightened uncertainty acts as a channel for propagating shocks, thereby amplifying their influence. Consequently, our implications for policymakers emphasize that while heightened uncertainty does not inherently hinder the transmission mechanism, it does disrupt monetary policy by escalating the costs associated with reducing inflation.

Supporting fiscal policy decisions on the revenue side during the COVID-19 pandemic. Analysis and forecasting of personal income taxes and social contributions. Lead analyst in charge of the lump-sum tax of small businesses and entrepreneurs.

Essays on the nonlinear transmission of monetary policy Supervisor: István Kónya