by Dirk Ehnts, Econoblog101
I found Google Public Data Explorer and I like it tremendously. Remember those discussion about the Baltics and how they do under austerity? You now can fact check any commentators claims quite rapidly. Let’s try it out on Ned Dolan, writing at Roubini.com:
Commentators often portray the Baltic countries as laboratories for testing the effects of austerity under fixed exchange rates. Although they share many common traits, Lithuania, Latvia, and Estonia have each followed distinctive paths during the global economic crisis. Estonia maintained tighter fiscal discipline going into the crisis, helping it to win entry into the Euro. Latvia suffered the deepest slump, but it has stuck with its austerity program for better or worse and has recently recorded some of the fastest quarterly growth rates in the EU. This post examines the distinctive elements that Lithuania has added to the Baltic saga.
I highlighted the facts described in the paragraph. Let us take a look at GDP per capita to find out what happened:
It seems that all economies collapsed with about the same severity. Estonia comes out fastest, Latvia and Lithuania look like twin brothers. Let’s turn to unemployment.
There are more similarities than dissimilarities again. Unemployment peaks at about 20% in all those countries, then falls. Estonia is the only country where unemployment falls back below 10%. Migration could be one of the main causes of success stories, as the Economist reported back in 2010, but ignoring it for now and just looking at GDP per capita and unemployment there is no Latvian success story. Ed Dolan looks at real GDP and finds that Latvia wins the competition. However, increasing per capita GDP by forcing your unemployed to emigrate is an economic policy out of the non-capitalist’s playbook. In the end, GDP is almost back to 2007 (so, 5 years of growth lost), but unemployment is about double what it was before the crisis.