IDEAS home Printed from https://ideas.repec.org/a/pes/ierequ/v5y2010i2p21-32.html
   My bibliography  Save this article

Analysis Of Economic Adjustments As A Result Of A Deep Crisis – The Case Of Latvia

Author

Listed:
  • Kristaps Lesinskis

    (BA School of Business and Finance in Riga)

Abstract

The Latvian economy has been the most crisis affected economy so far in the whole territory of the EU. The expected GDP fall during the year 2009 is close to 20%, the unemployment rate is approaching 20%, and prices have already started to fall. There are major fiscal problems in the economy. For the second year Latvian society has lived under the threat of devaluation of the national currency. The country has applied for serious external financial assistance from the IMF and the European Commission. The sharp decrease in the economic activity is strongly related to the high current account deficit in the balance of payments which developed during the previous years of a high growth thus making the Latvian economy extremely vulnerable. As a financial inflow has strongly decreased, there is a rapid decline in both private and government consumption and investment. This paper is aimed at analysing and explaining the roots of the drastic changes in almost all macroeconomic indicators that have led to serious economic adjustments and strict changes in the economic policy. The paper will assess the outcomes of the economic adjustments as well as extract the most important lessons that have to be taken from what has happened in the crisis most affected economy of the EU. Both a quantitative analysis of indicators and a qualitative analysis of economic policy decisions are analysed within this paper.

Suggested Citation

  • Kristaps Lesinskis, 2010. "Analysis Of Economic Adjustments As A Result Of A Deep Crisis – The Case Of Latvia," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 5(2), pages 21-32, December.
    • Handle: RePEc:pes:ierequ:v:5:y:2010:i:2:p:21-32
    DOI: 10.12775/EQUIL.2010.022
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.12775/EQUIL.2010.022
    Download Restriction: no
    File URL: https://libkey.io/10.12775/EQUIL.2010.022?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Maurice Obstfeld, 2001. "International Macroeconomics: Beyond the Mundell-Fleming Model," NBER Working Papers 8369, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bhattacharya, Prasad S. & Thomakos, Dimitrios D., 2008. "Forecasting industry-level CPI and PPI inflation: Does exchange rate pass-through matter?," International Journal of Forecasting, Elsevier, vol. 24(1), pages 134-150.
    2. Edward Ghartey, 2006. "Exchange Pressure, Sterilized Intervention and Monetary Policy in Ghana," EcoMod2006 272100031, EcoMod.
    3. Maurice Obstfeld, 2002. "Inflation-Targeting, Exchange-Rate Pass-Through, and Volatility," American Economic Review, American Economic Association, vol. 92(2), pages 102-107, May.
    4. Shambaugh, Jay, 2008. "A new look at pass-through," Journal of International Money and Finance, Elsevier, vol. 27(4), pages 560-591, June.
    5. Gabriel Srour, 2004. "Economic Integration, Sectoral Diversification, and Exchange Rate Policy in a Developing Economy," IMF Working Papers 2004/060, International Monetary Fund.
    6. Betts, Caroline M. & Kehoe, Timothy J., 2006. "U.S. real exchange rate fluctuations and relative price fluctuations," Journal of Monetary Economics, Elsevier, vol. 53(7), pages 1297-1326, October.
    7. Georg Feigl & Sepp Zuckerstätter, 2013. "Wettbewerbs(des)orientierung. WWWforEurope Policy Paper Nr. 2," WIFO Studies, WIFO, number 46674.
    8. Yana Valeryevna Dyomina, 2014. "Balance of Payments of East Asian Countries: Impact of the Coordinated Monetary Policy," Spatial Economics=Prostranstvennaya Ekonomika, Economic Research Institute, Far Eastern Branch, Russian Academy of Sciences (Khabarovsk, Russia), issue 1, pages 138-152.
    9. Yu Hsing, 2006. "Analysis of Short-term Exchange Rate Movements in Korea: Application of an Extended Mundell-Fleming Model," Global Economic Review, Taylor & Francis Journals, vol. 35(2), pages 145-151.
    10. Charles Engel, 2003. "Expenditure Switching and Exchange-Rate Policy," NBER Chapters, in: NBER Macroeconomics Annual 2002, Volume 17, pages 231-300, National Bureau of Economic Research, Inc.
    11. Daniels, Joseph P. & VanHoose, David D., 2006. "Openness, the sacrifice ratio, and inflation: Is there a puzzle?," Journal of International Money and Finance, Elsevier, vol. 25(8), pages 1336-1347, December.
    12. Linda S. Goldberg & Cédric Tille, 2006. "The International Role of the Dollar and Trade Balance Adjustment," NBER Working Papers 12495, National Bureau of Economic Research, Inc.
    13. Naknoi, Kanda, 2008. "Real exchange rate fluctuations, endogenous tradability and exchange rate regimes," Journal of Monetary Economics, Elsevier, vol. 55(3), pages 645-663, April.
    14. Rudolfs Bems & Robert C. Johnson, 2017. "Demand for Value Added and Value-Added Exchange Rates," American Economic Journal: Macroeconomics, American Economic Association, vol. 9(4), pages 45-90, October.
    15. Hernán Rincón & Norberto Rodríguez, 2016. "Nonlinear Pass-Through of Exchange Rate Shocks on Inflation: A Bayesian Smooth Transition VAR Approach," IHEID Working Papers 13-2016, Economics Section, The Graduate Institute of International Studies.
    16. Corsetti, Giancarlo & Pesenti, Paolo, 2005. "International dimensions of optimal monetary policy," Journal of Monetary Economics, Elsevier, vol. 52(2), pages 281-305, March.
    17. Alan M. Taylor & Mark P. Taylor, 2004. "The Purchasing Power Parity Debate," Journal of Economic Perspectives, American Economic Association, vol. 18(4), pages 135-158, Fall.
    18. Keshab Bhattarai & Sushanta K. Mallick, 2015. "Macroeconomic policy coordination in the global economy: VAR and BVAR-DSGE analyses," Working Paper series 15-01, Rimini Centre for Economic Analysis.
    19. Kevin Gallagher, 2012. "The Myth of Financial Protectionism: The New (and old) Economics of Capital Controls," Working Papers wp278, Political Economy Research Institute, University of Massachusetts at Amherst.
    20. Huang, Kevin X. D. & Liu, Zheng, 2004. "Production interdependence and welfare," Working Paper Series 355, European Central Bank.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pes:ierequ:v:5:y:2010:i:2:p:21-32. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Adam P. Balcerzak The email address of this maintainer does not seem to be valid anymore. Please ask Adam P. Balcerzak to update the entry or send us the correct address (email available below). General contact details of provider: https://edirc.repec.org/data/ibgtopl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.