Cilvēki stāv rindā Rīgas lidostā. Foto: Ieva Čīka, LETA
Atbildes raksts uz Latvijas Bankas ekonomista Oļega Krasnopjorova kritiku
In his post "Why I disagree with Mihails Hazans" Bank of Latvia economist, Oļegs Krasnopjorovs, again questions our recent research on the nature of Latvian unemployment. The main message of his post is that: the current unemployment in Latvia is almost entirely structural, i.e. the structurally unemployed represent 12-13%, of the workforce and this has remained unchanged since the late 1990s. We regard both of these propositions as entirely implausible.
Why does this question deserve attention? Despite seeming a purely academic exercise the answer to the question "Structural or Cyclical Unemployment?" has very strong policy implications. If a large share of unemployment is cyclical, then broad measures aimed at supporting economic recovery (e.g., infrastructure expenditure) can be an effective instrument to reduce unemployment.
