IDEAS home Printed from https://ideas.repec.org/a/elg/ejeepi/v12y2015i3p318-352.html
   My bibliography  Save this article

Macroeconomic policy regimes in emerging markets: the case of Latvia

Author

Listed:
  • Milka Kazandziska

    (Berlin School of Economics and Law, Germany)

Abstract

This paper's goal is to analyse economic development in Latvia using the concept of a macroeconomic policy regime (MPR). An MPR consists of foreign economic policy, industrial policy, the financial system, wage policy, monetary policy and fiscal policy. This paper, furthermore, aims to explore the functionality of the development of these elements in Latvia based on one normative model of an MPR using a post-Keynesian approach. This paper suggests that to achieve a growth consistent with an external balance, foreign economic policy and industrial policy should be given high priority in restructuring the economy towards production and exports of high value-added products. The financial system needs to provide sufficient finance for the business sector and maintain the stability of the financial sector, while monetary policy will be in charge of providing low-cost finance to the financial system, secure its stability and maintain the stability of the exchange rate. Wage policy would be in charge of stabilising the inflation rate. Fiscal policy's main tasks would be to reduce the shocks to aggregate demand and reduce income inequality. It will be argued that the institutional changes in Latvia paved the way for a dysfunctional policy mix, of the sort that led to unstable economic development, high current account deficits, capital flow volatility, financial system instability, inflation rate volatility, and increasing income inequality.

Suggested Citation

  • Milka Kazandziska, 2015. "Macroeconomic policy regimes in emerging markets: the case of Latvia," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 12(3), pages 318—352-3, December.
    • Handle: RePEc:elg:ejeepi:v:12:y:2015:i:3:p318-352
    as

    Download full text from publisher

    File URL: http://www.elgaronline.com/abstract/journals/ejeep/12-3/ejeep.2015.03.05.xml
    Download Restriction: Restricted access
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Eckhard Hein & Judith Martschin, 2021. "Demand and growth regimes in finance-dominated capitalism and the role of the macroeconomic policy regime: a post-Keynesian comparative study on France, Germany, Italy and Spain before and after the G," Review of Evolutionary Political Economy, Springer, vol. 2(3), pages 493-527, December.
    2. Dünhaupt, Petra & Hein, Eckhard, 2018. "Financialisation, distribution & the macroeconomic regimes before & after the crisis: A post-Keynesian view on Denmark, Estonia & Latvia," IPE Working Papers 104/2018, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    3. Huseynov, Nijat, 2017. "The Classification of Public Expenditure in Post-Soviet Union States and OECD Member Countries," Public Finance Quarterly, Corvinus University of Budapest, vol. 62(3), pages 380-400.

    More about this item

    Keywords

    macroeconomic regime; open economy policies; emerging countries; industrial policy; Latvia;
    All these keywords.

    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:elg:ejeepi:v:12:y:2015:i:3:p318-352. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Phillip Thompson (email available below). General contact details of provider: http://www.elgaronline.com/ejeep .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.