The three Baltic countries have been able to combine, Estonia since 1992 and Latvia and Lithuania since 1994, (1) a fixed exchange rate, (2) liberalisation of the capital account before having a well-functioning and fully supervised financial system, and (3) very large current account deficits....

The paper provides a comprehensive econometric analysis of currency substitution for Latvia. Rather than drawing inferences on the degree of currency substitution from domestic money demand modelling, the most common approach to empirical analysis of the phenomenon, direct modelling of currency...

The paper analyses the factors driving dollarization in Lithuania during the period from December 1992 to August 2000. Starting with a brief overview of the major economic and political developments in Lithuania, the study attempts to model the process of dollarization by applying rigorous time...

This paper presents preliminary results of modelling the Lithuanian block of the ESCB Multi-Country Model, LT_MCM. The theoretical structure of the LT_MCM is in line with most current mainstream macro models, i.e. supply factors determine the long-run equilibrium, while output is demand...

This study evaluates substitution of foreign currency balances in Estonia, a transition economy neighbouring countries participating in EMU. The focus is on substitution between dollar and euro balances in the three basic functions of money - unit of account, store of value and means of payment....

Credible economic reform has played a key role in Estonia's success in attracting significant amounts of foreign direct investment. This paper analyzes two years of data from a survey of foreign investors in Estonia to determine the major motivations to invest and the greatest problems faced by...

This paper analyses the long-run effects of Estonia's 2000 Income Tax Act with a dynamic general equilibrium model. Specifically, we consider the impact of the shift from an imputation system to one where companies only pay taxes on distributed profits. Balanced growth paths, transitional...

This paper investigates stock market reaction to debt arrangements in Russia. The analysis of the valuation of debt arrangements by stock markets provides information about the use of debt by Russian companies. We apply the event study methodology to check whether debt announcements lead to...

This study examines the expanding role of fiscal policy at a time of financial crisis. It analyses the stimulative fiscal measures of the Russian government in 2008-2010 and compares these with similar actions taken in other countries. The risks and limitations associated with the development...

The voluminous literature on the privatization of Russian industry overlooks, almost completely, the story of enterprise land rights – a story that does not jibe well with the standard narrative of post-Soviet reform. This paper explains the path that has led to significant inter-regional...