The September 2025 issue of the Financial and Economic Review is now published
The published studies in the September issue of our scientific journal are about the challenges facing central banks, a historical comparison of the outlook for China and Japan, the interaction between inflation and inflation expectations, the relationship between competitiveness, resilience and risk structure, and an income-adjusted loan structure. The feature article presents the strategic role of rare-earth metals.
In his study, Willem H. Buiter presents the key challenges facing central banks and the possible responses to them, with reference to the US Fed and the Bank of England. He focuses on issues related to profit and loss sharing and recapitalisation, the average inflation targeting system, the operational independence of central banks, the fiscal theory of the price level, the interacting relationship between financial stability and price stability, the effective lower bound of the policy rate and, in this context, the introduction of a future interest-bearing retail central bank digital currency.
In her study, Alicia Garcia Herrero investigates the similarities between the Chinese and Japanese economies. China's economy has been experiencing a steady slowdown since 2012. Following the burst of the real estate bubble in 2021, concerns about deflationary pressures have raised the possibility that China may follow a trajectory similar to that of Japan in the 1990s. Both countries have similar structural characteristics. The responses are also similar, but differ in key respects: China is still a developing economy, has greater growth potential, and represents a more significant geopolitical force than Japan.
The study by Chaoyi Chen, Tamas Barko and Olivér Nagy explores the relationship between inflation and inflation uncertainty using a novel approach. The proposed empirical model allows for the decomposition of inflation uncertainty into short-term and time-varying long-term components. Testing the model on UK data, the authors find that macroeconomic and financial variables have a significant impact on the long-term component of inflation uncertainty. Furthermore, when short-term inflation uncertainty is separated from time-varying long-term uncertainty, the evidence that past inflation increases short-term uncertainty becomes much weaker.
Nowadays, due to the increasingly volatile business environment, the adaptive capacity of firms is gaining importance, particularly in responding to sudden and extreme shocks. László Csorba demonstrates in his study how the risk structure of businesses affects their competitiveness and resilience. The results show that a balanced risk structure is essential, but equally critical is avoiding overly stretched planning while ensuring that the businesses aim to accumulate – and are capable of building – sufficient financial, knowledge, and skill reserves.
The study by Zsombor Incze introduces an innovative loan structure that incorporates expected income growth over the course of a career into the determination of repayment instalments and loan amounts. Based on the results, individuals with expected stable income growth (such as physicians, in the example presented) can obtain significantly larger loan amounts than under conventional annuity-based contracts. This approach could enhance housing affordability, while at the same time requiring new regulatory solutions.
The feature article by Norbert Szőcs shows how rare-earth metals have become geopolitical and economic weapons, and draws attention to the importance of these raw materials in competitiveness. The reader is also offered insight into the market pricing of rare earth elements, and an outlook on the expected global landscape.
In addition to the above, the September issue of the Financial and Economic Review includes one book review and one conference report.
The new issue can be viewed on the website of our Journal:
The Financial and Economic Review
We wish you a very pleasant reading.
Editorial staff of the Financial and Economic Review/Magyar Nemzeti Bank