Latvia stands out as the East European country hardest hit by the global financial crisis; it lost approximately 25 percent of its GDP between 2008 and 2010. It was also the most overheated economy before the crisis. But in the second half of 2010, Latvia returned to economic growth. How did this happen so quickly? Current Latvian Prime Minister Valdis Dombrovskis, who shepherded Latvia through the crisis, and renowned author Anders slund discuss why the Latvian economy became so overheated; why an IMF and European Union stabilization program was needed; what the Latvian government did to resolve the financial crisis and why it made these choices; and what the outcome has been. This book offers a rare insider's look at how a national government responded to a global financial crisis, made tough choices, and led the country back to economic growth.

Financial sector reform in the Baltic countries is reviewed in light of the banking crises that emerged during the reform period. It is argued that the crises had their roots in the structural deficiencies specific to planned economies and the financial environment that developed before and after these countries regained their independence, thus rendering them largely inevitable. Because of the low level of financial intermediation, however, even the failure of large banks had limited systemic effects and a minor negative impact on output and incomes. The crises slowed down the financial reform process, but brought about a desired consolidation of the banking sector.

Russia’s war of aggression against Ukraine has led to higher energy prices and disruptions in trade and supply chains, weighing on economic growth. Economic convergence had already slowed down before the pandemic, calling for accelerating structural reforms. Rising spending pressures related to defence, internal security, health and old age poverty need to be addressed by raising spending efficiency and tax revenue, while the tax burden should be shifted from labour towards other income, property, and environmental taxes. Continuing to improve the capacity of the public sector, fostering investment and innovation and addressing skilled labour shortages are key for raising potential growth. Low credit supply is a main factor for weak investment and should be tackled by fostering competition and deepening capital markets. High informality, which hinders access to finance and distorts the level playing field, should be addressed by reducing labour taxes for low-wage earners, improving tax enforcement and continuing to fight corruption. Strengthening the power of the Competition Council to enforce competitive neutrality of state-owned enterprises and challenge regulation that restricts competition would help to foster business dynamism and innovation. Addressing skilled labour shortages will require facilitating skilled migration and investing more in human capital. SPECIAL FEATURE: RAISING INVESTMENT TO SUPPORT GROWTH

This book offers overviews of issues in banking sector reform and capital markets in Central and Eastern Europe, China and Israel.

Traditional research about Financial Stability and Sustainable Growth typically omits Earnings Management (as a broad class of misconduct), Complex Systems Theory, Mechanism Design Theory, Public Health, psychology issues, and the externalities and psychological effects of Fintech. Inequality, Environmental Pollution, Earnings Management opportunities, the varieties of complex Financial Instruments, Fintech, Regulatory Fragmentation, Regulatory Capture and real-financial sector-linkages are growing around the world, and these factors can have symbiotic relationships. Within Complex System theory framework, this book analyzes these foregoing issues, and introduces new behaviour theories, Enforcement Dichotomies, and critiques of models, regulations and theories in several dimensions. The issues analyzed can affect markets, and evolutions of systems, decision-making, "nternal Markets and risk-perception within government regulators, operating companies and investment entities, and thus they have Public Policy implications. The legal analysis uses applicable US case-law and statutes (which have been copied by many countries, and are similar to those of many common-law countries). Using Qualitative Reasoning, Capital Dynamics Theory (a new approach introduced in this book), Critical Theory and elements of Mechanism Design Theory, the book aims to enhance cross-disciplinary analysis of the above-mentioned issues; and to help researchers build better systems/Artificial-Intelligence/mathematical models in Financial Stability, Portfolio Management, Policy-Analysis, Asset Pricing, Contract Theory, Enforcement Theory and Fraud Detection. The primary audience for this book consists of university Professors, PHD students and PHD degree-holders (in industries, government agencies, financial services companies and research institutes). The book can be used as a primary or supplementary textbook for graduate courses in Regulation; Capital Markets; Law & Economics, International Political Economy and or Mechanism Design (Applied Math, Operations Research, Computer Science or Finance).

Since the end of the Cold War there has been an increased interest in the Baltics. The Baltic States brings together three titles, Estonia, Latvia and Lithuania, to provide a comprehensive and analytical guide integrating history, political science, economic development and contemporary events into one account. Since gaining their independence, each country has developed at its own pace with its own agenda and facing its own obstacles. The authors examine the tensions accompanying a post-communist return to Europe after the long years of separation and how each country has responded to the demands of becoming a modern European state. Estonia was the first of the former Soviet republics to enter membership negotiations with the European Union in 1988 and is a potential candidate for the next round of EU expansion in 2004. Lithuania and Latvia have also expressed their desire for future membership of NATO and the EU.

Combining academic theory with practical case studies, this book helps students understand global financial markets and business management.

The book provides an innovatory internationally comparative causal analysis of the variation in political and economic outcomes of post-communist transformations after the first decade, using multi-value qualitative comparative analysis and TOSMANA software. This analysis includes a critical revision of received dichotomies (e.g. on gradualism versus "shock therapy") about post-communist transformation, a discussion of the counterfactual scripts of post-communist transformation, and contributes to current debates on the varieties of post-communist capitalism. This conceptual framework is applied in case studies of the transformation in the Baltic States, with special consideration given to the possibility of alternatives to the Lithuanian way and the challenges of populism in this country's politics. Book jacket.