Republic of Latvia: Selected Issues

International Monetary Fund

No 2005/277, IMF Staff Country Reports from International Monetary Fund

Abstract: This Selected Issues paper seeks to determine the macroeconomic effects of credit growth in Latvia. To do so, the paper relies on two approaches. First, a vector autoregressive system consisting of domestic credit, real activity, inflation, and the current account is used to determine responses to a positive shock to credit growth. It also calibrates the IMF’s Global Fiscal Model to simulate the macroeconomic effects of Latvia’s financial integration with the European Union and developing financial system. The paper also discusses the balance sheet approach to macroprudential vulnerabilities in Latvia.

Keywords: ISCR; CR; Latvia; bank; NRDs; credit growth; foreign currency; maturity mismatch; NRD bank; credit expansion; liquidity mismatch; Domestic credit; Credit; Currencies; Current account deficits; Consumer credit; Baltics; Western Europe; Central and Eastern Europe; Eastern Europe; Global (search for similar items in EconPapers)
Pages: 32
Date: 2005-08-10
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Citations: View citations in EconPapers (1)

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