BICEPS/SSE Riga Research Seminar: Economic Growth (Regimes) and Capital Flows in the Baltic States

We are pleased to restart BICEPS/SSE Riga research seminars and invite you to the first seminar, which will take place on Thursday, September 15, at 17:00 at the usual venue – room 611.

Speaker: Karsten Staehr (Tallinn University of Technology, Bank of Estonia)

Title: Economic Growth (Regimes) and Capital Flows in the Baltic States

Time: Thursday, September 15, 17:00

Venue: SSE Riga, room 611


This paper considers the growth performance of the Baltic states from the early 1990s to 2021 and in particular the noticeable changes in trend growth over time. Trend growth and income convergence were fast before the global financial crisis, but slowed down markedly afterwards. Panel data estimations using seeming unrelated regression) suggest that the shift reflects closely the dynamics of net international capital flows and furthermore depicts a fundamental change of growth regime. Before the crisis, the rapid growth was held up by domestic demand made possible by large net capital inflows or current account deficits. After the crisis, economic growth has been supported by external demand, and so economic growth has been positively associated with net exports or the current account balance. The shift in the economic growth regime after the global financial crisis may be behind the lower trend growth but has arguably also contributed to more sustainable growth.


No prior registration for the seminar is necessary. For any questions about the seminar, or if you have a colleague that would like to be added to the distribution list, please write to Nicolas Gavoille.