Lots of discussions going on in Latvia. Some call it success and others a disaster.
The first camp econs say Latvia shows how economy can gain if fiscal austerity is done well. They also add pegged exchange rate system can work provided one can do internal adjustment which other Eurozone economies have failed in doing. The second camp says if Latvia is a success model, then one should not really bother about growth in depressions. Its economy has grown but is still way below the pre-crisis levels etc. The first is looking at %ages and second at absolute numbers..
Here are the views:
- Oliver Blanchard IMF chief econ)
- This Blog’s earlier analysis questioned whether Latvia can be called a success at all..(needs to be updated but not sure how much has changed)
- This analysis further looks at Latvian numbers..
Amazing to see how we keep going to Latvian example time and time again