Jingle Bells and Struggling GIPS: Comparing the Baltic and the Southern Eurozone’s Crisis Experience Using the Varieties of Capitalism Framework

Vytautas Kuokštis ()
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Vytautas Kuokštis: Vilnius University, Faculty of Philosophy, Department of Sociology, Lithuania, and Lecturer at Vilnius University, Institute of International Relations and Political Science

Acta Oeconomica, 2015, vol. 65, issue supplement1, 39-64

Abstract: This article compares the experience of the Baltic countries and the eurozone’s southern members, the GIPS (Greece, Italy, Portugal, Spain), in terms of the run-up to the Great Recession and the eurozone crisis, responses during the downturn, and the subsequent recovery (or lack thereof). It discusses numerous apparent similarities in terms of the build-up of macroeconomic vulnerabilities and the content of anti-crisis strategies pursued as well as the substantially different results of these policies. This article applies the VoC (Varieties of Capitalism) approach. To this end, it presents theoretical expectations regarding different varieties’ vulnerability to macroeconomic imbalances, preferences regarding anti-crisis policy as well as the likely outcome of the internal devaluation strategy. The article finds the VoC approach largely useful, although it is more helpful in accounting for the nature of reaction to the crisis and the outcomes of anti-crisis policy, while less so in explaining the initial accumulation of vulnerabilities.

Keywords: Baltic states; GIPS; varieties of capitalism; crisis; internal adjustment; internal devaluation (search for similar items in EconPapers)
JEL-codes: P52 (search for similar items in EconPapers)
Date: 2015
Note: This work was supported by a Postdoctoral fellowship funded by European Union Structural Fund “Postdoctoral Fellowship Implementation in Lithuania” within the framework of the “Measure for Enhancing Mobility of Scholars and Other Researchers” and the “Promotion of Student Research” (VP1-3.1-ŠMM-01) of the “Program of Human Resources Development Action Plan”. Earlier versions of this article were presented at a seminar at the School of Sociology, Politics and International Studies of Bristol University on 13 December, 2013 and the 7th Pan-European Conference on the European Union in the Hague on 5-7 June, 2014. The author is grateful to Magnus Feldmann, Zenonas Norkus, Stefanie Walter, Fabio Bulfone, Martijn Vlaskamp, and Sebastian Dörr for providing valuable comments.
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