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Latvia is the new Argentina (slightly wonkish)
Paul Krugman —
I’ve been saying this for a couple of weeks, but Edward Hugh has the goods. Hugh puts his finger, in particular, on one gaping hole in the logic of the opponents of devaluation. We can’t devalue, they say, because the Latvian private sector has a lot of debts in euros, and a devaluation would make it very hard for borrowers to service those debts. As Hugh points out, the proposed alternative — sharp wage cuts, and basically a major domestic deflation — will also make it hard to service those debts. In fact, I’d be a bit more specific than Hugh: other things equal, ...
Travelling Through Latvia In Good Company
Latvia Economy Watch —
Well, it seems I'm not the only one who thinks that the IMF have made a bad decision here, this year's economics Nobel Prize winner Paul Krugman seems to agree. From his New York Times blog: I’ve been saying this for a couple of weeks, but Edward Hugh has the goods. Hugh puts his finger, in particular, on one gaping hole in the logic of the opponents of devaluation. We can’t devalue, they say, because the Latvian private sector has a lot of debts in euros, and a devaluation would make it very hard for borrowers to service those debts. ...
Travelling Through Latvia In Good Company
Baltic Economy Watch —
Well, it seems I'm not the only one who thinks that the IMF have made a bad decision here, this year's economics Nobel Prize winner Paul Krugman seems to agree. From his New York Times blog: I’ve been saying this for a couple of weeks, but Edward Hugh has the goods. Hugh puts his finger, in particular, on one gaping hole in the logic of the opponents of devaluation. We can’t devalue, they say, because the Latvian private sector has a lot of debts in euros, and a devaluation would make it very hard for borrowers to service those debts. ...
The Long And Difficult Road To Wage Cuts As An Alternative To Devaluation
Global Economy Matters —
... no a local currency to devalue, while in the case of the latter two the presence of prior large scale foreign currency borrowing means that authorities are nervous about anything that smacks of devaluation (since the providing banks would take large losses following the inevitable defaults, and the cooperation of these providing banks is necessary in the future if the economies in question are ever to recover). This latter view (no devaluation) prevails even though many economists, (including myself), would argue that is a highly questionable one, since wage ...
The Long And Difficult Road To Wage Cuts As An Alternative To Devaluation
Baltic Economy Watch —
... no a local currency to devalue, while in the case of the latter two the presence of prior large scale foreign currency borrowing means that authorities are nervous about anything that smacks of devaluation (since the providing banks would take large losses following the inevitable defaults, and the cooperation of these providing banks is necessary in the future if the economies in question are ever to recover). This latter view (no devaluation) prevails even though many economists, (including myself), would argue that is a highly questionable one, since wage ...
The Long And Difficult Road To Wage Cuts As An Alternative To Devaluation
Latvia Economy Watch —
... no a local currency to devalue, while in the case of the latter two the presence of prior large scale foreign currency borrowing means that authorities are nervous about anything that smacks of devaluation (since the providing banks would take large losses following the inevitable defaults, and the cooperation of these providing banks is necessary in the future if the economies in question are ever to recover). This latter view (no devaluation) prevails even though many economists, (including myself), would argue that is a highly questionable one, since wage ...
The Long And Difficult Road To Wage Cuts As An Alternative To Devaluation
Euro Watch —
... no a local currency to devalue, while in the case of the latter two the presence of prior large scale foreign currency borrowing means that authorities are nervous about anything that smacks of devaluation (since the providing banks would take large losses following the inevitable defaults, and the cooperation of these providing banks is necessary in the future if the economies in question are ever to recover). This latter view (no devaluation) prevails even though many economists, (including myself), would argue that is a highly questionable one, since wage ...
Non-performing Loans In Latvia
Latvia Economy Watch —
This is all so tragic, and so foreseeable (viz, my original post here, for example). Krguman on me: "Hugh puts his finger, in particular, on one gaping hole in the logic of the opponents of devaluation. We can’t devalue, they say, because the Latvian private sector has a lot of debts in euros, and a devaluation would make it very hard for borrowers to service those debts. As Hugh points out, the proposed alternative — sharp wage cuts, and basically a major domestic deflation — will also make it hard to service those ...
Non-performing Loans In Latvia
Baltic Economy Watch —
This is all so tragic, and so foreseeable (viz, my original post here, for example). Krguman on me: "Hugh puts his finger, in particular, on one gaping hole in the logic of the opponents of devaluation. We can’t devalue, they say, because the Latvian private sector has a lot of debts in euros, and a devaluation would make it very hard for borrowers to service those debts. As Hugh points out, the proposed alternative — sharp wage cuts, and basically a major domestic deflation — will also make it hard to service those ...
