Can Lithuania’s New Government Meet the Economic Challenges Ahead?

Commentators often portray the Baltic countries as laboratories for testing the effects of austerity under fixed exchange rates. Although they share many common traits, Lithuania, Latvia, and Estonia have each followed distinctive paths during the global economic crisis. Estonia maintained tighter fiscal discipline going into the crisis, helping it to win entry into the Euro. […]

How Do the Baltic Countries Cope?

It is time for an update on the economic developments in the Baltic countries. Official GDP numbers for the third quarter of 2009 have recently been published and a clearer picture emerges. I have been asked by many foreigners how the Baltic countries look these days. The foreigners ask whether unemployed and poor people hang around in the streets and whether people are gearing up to protest against the economic crisis and the actions of their leaders. I live in Estonia and travel regularly in the two other Baltic countries, so it is my hope that I can contribute with some personal experiences from the ground. I do not want to downplay the seriousness of the economic downturn, but I will argue that the situation in the Baltics might be less bleak than the statistics suggest.

Rebalancing in the Baltics – A Preliminary Assessment

“In my view … it is impossible to understand this crisis without reference to the global imbalances in trade and capital flows that began in the latter half of the 1990s.” Bernanke (2009) Executive Summary Compared with the average quarterly value of GDP in 2007-08, the first two quarters of 2009 are down in nominal […]