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Inflation in the Baltic States and Other EU New Member States: Similarities, Differences and Adoption of the Euro


  • Alf Vanags

    () (Baltic International Centre for Economic Policy Studies (BICEPS))

  • Morten Hansen

    () (Stockholm School of Economics in Riga (SSE Riga))


This paper examines the inflation experience of the EU new member states (NMS) since 2000, with particular focus on the three Baltic countries – Estonia, Latvia and Lithuania. Apart from being a natural focus of interest for residents of these countries it appears that their recent inflation experience – accelerating inflation in all three, with Latvia and Estonia posting the two highest NMS inflation rates in 2005 – marks them out from the other NMS. Indeed Latvia is now the country with the highest inflation rate in all of the EU. At the same time the actual levels of inflation are different across the three Baltic countries. So the central questions addressed in the paper concern the reasons behind the acceleration of inflation in the Baltic states when such an acceleration has not been observed in the other NMS and how to reconcile the ‘common Baltic acceleration’ with the observation that levels of inflation in the three countries remain different.

Suggested Citation

  • Alf Vanags & Morten Hansen, 2006. "Inflation in the Baltic States and Other EU New Member States: Similarities, Differences and Adoption of the Euro," SSE Riga/BICEPS Occasional Papers 1, Baltic International Centre for Economic Policy Studies (BICEPS);Stockholm School of Economics in Riga (SSE Riga).
  • Handle: RePEc:bic:opaper:1

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    Cited by:

    1. Bogdan DIMA & Ştefana Maria DIMA & Flavia BARNA, 2019. "Inflation Contagion Effects in the Baltic Countries: A Time-varying Coefficients VAR with Stochastic Volatility Analysis," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(1), pages 72-87, March.
    2. Alf Vanags & Morten Hansen, 2008. "Stagflation in Latvia: how long, how far, how deep?," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 8(1), pages 5-28, October.

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