A temporary loss of pace or the "middle income trap" - a commentary on the tasks for Hungary's economic development

The latest Hungarian economic growth data, though favourable, do not let us forget that in the longer term growth is weak compared to the preceding period – as well as to the performance of the East-Central European region, which is more dynamic than the European average. In order to make sense of the past decade’s relative loss of pace and lay the foundations for future development policy, it is worth placing Hungary’s case in the context of the slowing tempo typical of middle-income countries. The economic development policies currently pursued by the government are aimed at increasing output in the processing industry, and by extension exports, while relevant international experience advises that it is the higher value-added activities of the global value chain, particularly business services, which should be developed further. In this way real wages and income levels could be increased, and the economy would be less exposed to the fluctuations of international cycles.

Framing the Game: Objections to Bapat’s Game-Theoretic Modeling of the Afghan Surge

In a recently published article in the prestigious journal Foreign Policy Analysis, Navin A. Bapat uses a rationalist approach to explain key bargaining processes related to the Afghanistan conflict, concluding that “the Afghan mission may continue for political reasons until it is impossible to sustain militarily.” The article captures the essence of the strategic situation in Afghanistan: the losing dynamic involved. This brief commentary in response is an attempt to shed light on where the tenets of Bapat’s game-theoretic model may be erroneous, even while the model does produce conclusions that appear valid overall.