Erik Berglöf: Debt: Inflation and Austerity 2/5

The video discusses the challenges of austerity and growth in Europe, focusing on the Baltic States as a case study. It examines the severe economic crisis they faced, the draconian austerity measures implemented, and the factors that contributed to their recovery. The importance of a favorable business environment and governance-heavy capital is highlighted as key to attracting foreign investment and restoring growth. The video also contrasts the Baltic experience with the southern European periphery, emphasizing the need for reforms and external support.

What role did external pressures play in the economic situation of Latvia?

In what ways did the Baltic states implement austerity measures differently from the southern periphery?

What is meant by 'governance heavy capital' in the context of attracting foreign investment?

What are the implications of the findings discussed for future economic policies in Europe?