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In RealTime posts, PIIE senior staff and colleagues discuss the fast-moving economic news, financial developments, and public policy choices confronting the United States and the world.
Note: Natalia Aivazova has provided me with valuable research assistance, elaborating on all the statistics. In early 2009, the International Monetary Fund (IMF) and the European Bank of Reconstruction and Development (EBRD) raised a cry of despair. They feared that several of the 15 Western European banks that dominated the banking system of Central and [...]
On January 31, the Latvian parliament gave final passage to a law applying for adoption of the euro. The vote was 52 to 40. The Latvian government will now submit an application to the European Union in February, and the European Commission will then prepare a report assessing whether Latvia is ready to join the [...]
The International Monetary Fund (IMF) has just published a public information note about its preliminary findings from the annual review of the Latvian economy. It is rare for the IMF to write anything as positive as it did in its first summary paragraph: Latvia’s economy continues to recover strongly. Following real GDP growth of 5.5 [...]
Lithuania held the first round of its parliamentary elections on October 14, setting in motion the likely ouster of the center-right government of Prime Minister Andrius Kubilius by a center-left government. The left won heavily, with a combined total of 46 percent of the proportional vote against 23 percent. The voting was generally seen as [...]
The October World Economic Outlook of the International Monetary Fund (IMF), issued semi-annually, contains an ambitious chapter 3, “The Good, the Bad, and the Ugly: 100 Years of Dealing with Public Debt Overhangs.” It is an empirical study of developed countries that have had public debt of more than 100 percent of GDP in the [...]
Unexpectedly, Slovenia is going through a financial crisis despite a record of sound behavior on many fronts. Its government bond yields surged above 7 percent in August, and the country is having trouble maintaining access to international financial markets. The question today is whether Slovenia will join the roster of countries needing a bailout program [...]
What seems like an arcane squabble over relative growth rates between Iceland and Latvia has erupted into an argument between two heavyweight voices on economic policy—the Council on Foreign Relations (CFR) and Paul Krugman. Obscure though it may be, their disagreement is important. It is actually a proxy for a much bigger debate on whether [...]
Internal devaluation has become a big issue in the euro area but it remains controversial. In the latest International Monetary Fund (IMF) letter of intent for Greece, box 3 on “Internal Experience with Internal Devaluation” (pp. 48–49) opposing internal devaluation has been incorporated. It summarizes the standard arguments, but the point of this comment is [...]
Today, the Latvian government can claim victory. In the first quarter of this year, Latvia’s annualized GDP grew by 6.8 percent, the highest growth rate in Europe, and last year Latvia recorded a growth rate of 5.5 percent, the third highest in Europe. Four years ago, GDP plummeted by a total of 24 percent because [...]
Latvia held early parliamentary elections on September 17th, only one year after the last elections to parliament. The voting came after former President Valdis Zatlers called for a referendum on the dissolution of the parliament, because the parliament let one parliamentarian-cum-oligarch, Ainars Slesers, keep his parliamentary immunity in spite of prosecution for corruption. In July, [...]