On the Latvian Monetary Policy
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LATVIA is one of the most hit EU countries by the global economic crisis. For those interested in Latvian monetary policy I have uploaded my working paper (below the text). If the download does not work, try also here.
Essay examines the influence of political decisions in the early stage of nation-state building process on economic policies and performance of the country. We argue that decision to employ a certain monetary policy in the early 1990s was partly driven by national political forces.
Although this had undoubtedly positive effects on the stabilization of Latvian economy in 1990s, pursuing the same policy has to a certain extent contributed to economic hardships in the second decade of Latvian modern history. Moreover, the policy of fixed exchange rate regime has deprived Latvia of important tools to deal with the economic problems, even worsened by the global financial crisis.