Blanchard, Griffiths, Gruss on Latvia and the EZ

BPEA Fall 2013: Hard to Draw Wider EU Lessons from Latvia’s Economic Policies Post-Financial Crisis

In spite of the fact that Latvia is a small country, it has been an object of intense attention during the financial crisis because of the economic policies it put in place to get its economy back on track. By maintaining its currency peg, adjusting through internal devaluation and front loading fiscal austerity, this nation of 2 million is now, 5 years later, back on a strong economic footing, although it may have been quite painful to get there.