Finland and Its Northern Peers in the Great Recession

Suni PaavoVihriälä Vesa

Abstract

The report focuses on the relative macroeconomic performance since the global financial crisis of six Northern European countries with a special emphasis on Finland. While fiscal and monetary policies have definitely impacted on macroeconomic outcomes in the six countries examined, as a whole they do not appear to be the key driving forces of the differences observed between the countries. The initial vulnerabilities, the nature of shocks and the resilience of the economies appear more important in explaining the differences. In particular, the weakness of growth in Finland can best be explained by a series of exceptional negative shocks in combination with a too weak capacity of the economy to improve its cost competitiveness in the absence of exchange rate flexibility.

Publication info

Series
ETLA Raportit - Reports 49
Date
15.01.2016
Keywords
Macro economy, fiscal policy, monetary union, competitiveness, Finland
ISSN
2323-2447, 2323-2455 (Pdf)
Jel
F45, F47, E63, E65, P52
Pages
33
Price
15 €
Availability of print version
Available
Language
English