How Latvia Came Through the Financial Crisis (Peterson Institute for International Economics: Special Report)

Latvia stands out as the East European country hardest hit by the global financial crisis; it lost approximately 25 percent of its GDP between 2008 and 2010. It was also the most overheated economy before the crisis. But in the second half of 2010, Latvia returned to economic growth. How did this happen so quickly? Current Latvian Prime Minister Valdis Dombrovskis, who shepherded Latvia through the crisis, and renowned author Anders slund discuss why the Latvian economy became so overheated; why an IMF and European Union stabilization program was needed; what the Latvian government did to resolve the financial crisis and why it made these choices; and what the outcome has been. This book offers a rare insider's look at how a national government responded to a global financial crisis, made tough choices, and led the country back to economic growth. Co-written by Dombrovskis, the Prime Minister of Latvia, and .Aslund, a senior fellow with the Petersen Institute for International Economy, this work reports on how Latvia responded to the financial and economic crisis of 2008-2010, suggesting that the Latvian response, "internal devaluation" through severe cuts in wages and public expenditures, provides key lessons for other countries seeking to a find ways out of crisis. The authors describe pre- and post-crisis policies, Dombrovskis describes the policy making decision process, and the authors evaluate policy results, which they largely deem positive, as growth has returned and serious social unrest was avoided. Annotation ©2011 Book News, Inc., Portland, OR (booknews.com)