The Economy of Hungary
Goulash Communism
After 1956, Hungary allowed limited private enterprise and consumer goods within socialism, a mild form nicknamed goulash communism.
A softer model.
1956
A revolution against Soviet control was crushed.
Kádár era
János Kádár offered more consumer goods and small private business in return for political loyalty.
New Economic Mechanism
From 1968, reforms let firms use some market signals.
Debt
Hungary borrowed heavily from Western banks in the 1970s and 1980s.
A private plot
Farmers were allowed to sell produce from small private plots.
Assuming Hungary's communist economy was the same as the USSR's
It was more liberal.
Key takeaways
- A revolution in 1956 was crushed.
- Kádár allowed some private activity.
- Reforms began in 1968.
- Debt grew.
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