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The depression of the 1990s in Finland : an analytic view

Author

Listed:
  • Seppo Honkapohja

    (Department of Economics, University of Helsinki, Finland)

  • Erkki Koskela

    (Department of Economics, University of Helsinki, Finland)

  • Jouko Paunio

    (Department of Economics, University of Helsinki, Finland)

Abstract

This paper deals with some aspects of the Finnish economic crisis in the 1990s by starting with a quick description of the main macroeconomic features of the crisis together with some empirical evidence on price and wage as well as interest rate determination. With these as a background a theoretical analysis of fiscal and monetary policies is presented by putting a special attention on the macroeconomic implications of high foreign debt and the banking system for the effects of monetary and fiscal policies. The paper ends up by interpreting the role of economic policy during the depression and considering problems of the external balance of the Finnish economy in the near future.

Suggested Citation

  • Seppo Honkapohja & Erkki Koskela & Jouko Paunio, 1996. "The depression of the 1990s in Finland : an analytic view," Finnish Economic Papers, Finnish Economic Association, vol. 9(1), pages 37-54, Spring.
    • Handle: RePEc:fep:journl:v:9:y:1996:i:1:p:37-54
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    References listed on IDEAS

    as
    1. Corsetti, Giancarlo & Roubini, Nouriel, 1991. "Fiscal deficits, public debt, and government solvency: Evidence from OECD countries," Journal of the Japanese and International Economies, Elsevier, vol. 5(4), pages 354-380, December.
    2. Cukierman, Alex & Meltzer, Allan H, 1989. "A Political Theory of Government Debt and Deficits in a Neo-Ricardian Framework," American Economic Review, American Economic Association, vol. 79(4), pages 713-732, September.
    3. Alesina, Alberto & Drazen, Allan, 1991. "Why Are Stabilizations Delayed?," American Economic Review, American Economic Association, vol. 81(5), pages 1170-1188, December.
    4. Roubini, Nouriel, 1991. "Economic and political determinants of budget deficits in developing countries," Journal of International Money and Finance, Elsevier, vol. 10(1, Supple), pages 49-72, March.
    5. William D. Nordhaus, 1975. "The Political Business Cycle," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 42(2), pages 169-190.
    6. Alberto Alesina & Roberto Perotti, 1995. "The Political Economy of Budget Deficits," IMF Staff Papers, Palgrave Macmillan, vol. 42(1), pages 1-31, March.
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    Citations

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    Cited by:

    1. Seppo Honkapohja & Erkki Koskela, 1999. "The economic crisis of the 1990s in Finland," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 14(29), pages 400-436.
    2. Yuriy Gorodnichenko & Enrique G. Mendoza & Linda L. Tesar, 2012. "The Finnish Great Depression: From Russia with Love," American Economic Review, American Economic Association, vol. 102(4), pages 1619-1644, June.
    3. Zoega Gylfi, 2010. "The Financial Crisis: Joblessness and Investmentlessness," Capitalism and Society, De Gruyter, vol. 5(2), pages 1-28, October.
    4. Kuismanen, Mika & Laakso, Seppo & Loikkanen, Heikki A., 1999. "Demographic Factors and the Demand for Housing in the Helsinki Metropolitan Area," Discussion Papers 191, VATT Institute for Economic Research.
    5. Jaakko Kiander & Jaakko Pehkonen, 1999. "Finnish unemployment: observations and conjectures," Finnish Economic Papers, Finnish Economic Association, vol. 12(2), pages 94-108, Autumn.
    6. Lars Jonung & Jaakko Kiander & Pentti Vartia, 2008. "The great financial crisis in Finland and Sweden - The dynamics of boom, bust and recovery, 1985-2000," European Economy - Economic Papers 2008 - 2015 350, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.

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    More about this item

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy

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