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1. Will Ukraine Be Able to Establish Real Property Rights?

Author:
Anders Åslund
Publication Date:
01-2018
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
Over time, the necessary economic reforms have become so obvious that they have become politically possible in most places. The great problem has become the establishment of real property rights. By and large, Central and Eastern Europe have managed to accomplish that not least thanks to support from the European Union. In the former Soviet Union, however, only Georgia succeeded in that endeavor. The big question today is whether Ukraine will manage to do so, or whether it will be caught in a low-economic-growth trap. The three main elements that are needed are independent courts, autonomous prosecutors, and a law-abiding law enforcement, while no old secret police structures should be allowed to sabotage them.
Topic:
Corruption, Democratization, Economics, Reform, and Elections
Political Geography:
Europe, Ukraine, and Eastern Europe

2. Revisiting the Latvian and Greek Financial Crises: The Benefits of Front-Loading Fiscal Adjustment

Author:
Anders Åslund
Publication Date:
05-2015
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
This paper discusses why Greece has done so poorly in comparison with all other European Union countries since the onslaught of the global financial crisis in 2008. To show what was wrong with its fiscal adjustment, this paper compares Greece with the other European Union country that was hit be the most severe fiscal crisis, namely Latvia. The conclusion is that front-loaded fiscal adjustment works much better. Greek economic policy has been a popular topic among opinion writers, notably Nobel Prize winner and New York Times columnist Paul Krugman, who claimed that Greece suffered from austerity. Because of his prominence in the international public debate, I shall scrutinize his arguments on the Greek crisis. The paper also examines what policy the International Monetary Fund has pursued with regard to Greece, and how its views have been influenced by the debate and Greek economic developments. Finally, the paper assesses what lessons can be drawn from the contrasting experiences of Latvia and Greece. The conclusion is that a fiscal adjustment should be sufficient to resolve the crisis to restore confidence and that it should be as front-loaded as is practically and politically possible.
Topic:
Financial Crisis, Finance, Economic growth, Macroeconomics, Fiscal Policy, and Trade
Political Geography:
Europe, Eastern Europe, Greece, and Latvia

3. An Economic Strategy to Save Ukraine

Author:
Anders Åslund
Publication Date:
11-2014
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
Ukraine has experienced a year of unprecedented political, economic, and military turmoil. The combination of Russian military aggression in the east and a legacy of destructive policies leading to pervasive corruption has plunged the country into an existential crisis. The West, meanwhile, has been largely paralyzed with uncertainty over how to assist Ukraine without reviving Cold War hostilities. Yet all is not lost for Ukraine. A tenuous ceasefire, along with the successful elections of President Petro Poroshenko in May and a new parliament in October offer an opportunity for economic reform. If the current ceasefire in the east holds, Ukraine has a great opportunity to break out of its vicious circle of economic underperformance. Yet, the window of opportunity is likely to be brief. The new government will have to act fast and hard on many fronts to succeed.
Topic:
Conflict Resolution, Security, Economics, and Politics
Political Geography:
Russia, Europe, and Ukraine

4. Ukraine's Choice: European Association Agreement or Eurasian Union?

Author:
Anders Åslund
Publication Date:
09-2013
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
Since gaining independence in December 1991, Ukraine has vacillated between the European Union and Russia for economic and political cooperation. Until recently neither had offered Ukraine much, but in the last few months, things have heated up. Ukraine's intention to sign an Association Agreement for political association and economic integration with the European Union has raised a furor in the Kremlin, which is now trying to block Ukraine from aligning itself with the European Union. Moscow has imposed trade sanctions in clear violation of its obligations in the World Trade Organization (WTO) and is pursuing an intense confrontation.
Topic:
Economics, Treaties and Agreements, World Trade Organization, and Bilateral Relations
Political Geography:
Russia, Europe, Ukraine, Asia, and Moscow

5. Hyperinflations Are Rare, but a Breakup of the Euro Area Could Prompt One

Author:
Anders Åslund
Publication Date:
11-2012
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
Hyperinflation is one of the most misused words in the English language. Two years ago, I heard a prominent American investor say that we were about to get hyperinflation, “not 15 percent a year as under Jimmy Carter but perhaps 5 percent a year.” Hyperinflation is usually 1,000 percent or more a year. The standard definition by Philip Cagan (1956) is that hyperinflation starts when inflation reaches 50 percent a month, and then the economy is in hyperinflation for one year until monthly inflation falls and stays below 50 percent.
Topic:
Economics, International Trade and Finance, Markets, Regional Cooperation, and Monetary Policy
Political Geography:
Europe

6. Why a Breakup of the Euro Area Must Be Avoided: Lessons from Previous Breakups

Author:
Anders Åslund
Publication Date:
08-2012
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
One of the big questions of our time is whether the Economic and Monetary Union (EMU) will survive. Too often, analysts discuss a possible departure of one or several countries from the euro area as little more than a devaluation, but I argue that any country's exit from the euro area would be a far greater event with potentially odious consequences. Exit from the EMU cannot be selective: It is either none or all.
Topic:
Economics, International Trade and Finance, and Monetary Policy
Political Geography:
Europe

7. Southern Europe Ignores Lessons from Latvia at Its Peril

Author:
Anders Åslund
Publication Date:
06-2012
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
In the current financial crisis plaguing Europe, Latvia stands out for resolving its financial problems quickly and resolutely. After contracting 24 percent in 2008 and 2009, it grew at the rate of 5.5 percent in 2011. The speed and determination. with which the government carried out austerity measures in 2009 and restored confidence after suffering the worst output decline is a crucial lesson for the ailing South European countries—Greece, Italy, Portugal, and Spain. Many policy observers and economists have dismissed Latvia's crisis resolution as irrelevant to the situation in Southern Europe. The Latvian orange, they say, cannot be compared with the South European apples. I argue otherwise.
Topic:
Economics, International Trade and Finance, Monetary Policy, and Financial Crisis
Political Geography:
Europe, Greece, and Latvia

8. Lessons from Reforms in Central and Eastern Europe in the Wake of the Global Financial Crisis

Author:
Anders Åslund
Publication Date:
04-2012
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
The response of the ten new eastern members of the European Union to the global financial crisis has valuable lessons of crisis resolution for the euro area. These countries were severely hit by the crisis in the fall of 2008 and responded with extensive reforms. Crisis made the unthinkable possible. This paper outlines the main reform measures that the ten Central and East European (CEE) countries carried out. It then quantifies to what extent the CEE countries resolved the macroeconomic crisis and explores the effects of the reforms on future growth prospects. The fourth and major section discusses how the political economy of the crisis resolution actually worked. Finally, the author examines what lessons euro area countries can learn from the crisis resolution of the newest members of the European Union.
Topic:
Debt, Economics, International Trade and Finance, Markets, Political Economy, and Financial Crisis
Political Geography:
Europe

9. Lessons from the East European Financial Crisis, 2008-10

Author:
Anders Åslund
Publication Date:
06-2011
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
In the fall of 2008, Central and Eastern Europe became a flashpoint in the global financial crisis. The ten new eastern members of the European Union were in a state of severe overheating in all regards. Inflation surged everywhere and to double digits in Bulgaria, Estonia, Latvia, and Lithuania. Wages and real estate prices skyrocketed, rendering these countries ever less competitive, which further undermined their current account balance. Output plunged and unemployment soared.
Topic:
Economics, Global Recession, and Financial Crisis
Political Geography:
Europe, Lithuania, Estonia, Bulgaria, and Latvia

10. The Eurasian Growth Paradox

Author:
Nazgul Jenish and Anders Åslund
Publication Date:
06-2006
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
In the first decade of postcommunist transition, multiple growth regressions showed that the more radical and comprehensive market economic reform was, the earlier a country returned to economic growth and the more vigorous its growth, and that Central Europe took the lead. Since 2000, however, the Commonweath of Independent States (CIS) countries have had more than 4 percentage points higher annual growth than the Central European countries. A regression analysis for 20 postcommunist countries shows, with strong significance, that reducing public expenditures has most effectively stimulated economic growth. As expected, oil exports are also positive and significant. The distance from the European Union is also positive and significant: that is, the further from the European Union, the higher the economic growth. The effect of corruption is negative for growth but only marginally significant. Neither the laggard effect nor investment reveals any significant effect. The conclusion is that at least among postcommunist countries more emphasis should be given to reducing public expenditures to boost economic growth.
Topic:
Economics, International Organization, and Political Economy
Political Geography:
Europe and Central Europe