Latvia’s Internal Devaluation: A Success Story?

by Guest Authors Mark Weisbrot, an economist and Co-Director of the Center for Economic and Policy Research (CEPR), in Washington, D.C. – Full bio here; and Rebecca Ray, Research Associate, CEPR – LinkedIn bio here. Executive Summary Advocates of an economic strategy of “internal devaluation” have recently pointed to Latvia as an example of successful …

Obama Stimulus May Have Gotten It Right After All

From 1Q2010 to 2Q2011, the stimulus caused the economy to operate above potential based on the CBO stimulus effect data. Now as the stimulus effect is waning, 2Q2011 GDP and Potential GDP are crossing. GDP trend lines show the economy is gravitating towards zero growth – and although the autopsy has not began, it is becoming clear that the stimulus did not provide the seeds necessary to reignite the economy.