Regional Formation and Development Studies

The article presents a theoretical examination of fiscal and monetary governance in the European Union and the United States, by comparing their institutional frameworks, fiscal and monetary policy regulations, and crisis-response mechanisms. This research is grounded in a comparative analysis of the EU and the United States spanning the years 2003 to 2024. The paper integrates a literature review with statistical comparisons and Ordinary Least Squares (OLS) regression, to investigate 11 macroeconomic indicators, which include tax revenue, government expenditure, public debt, the budget balance, the money supply, interest rates, inflation, unemployment, exchange rate fluctuations, and GDP per capita, adjusted for purchasing power parity. The analysis is organised into various economic phases (pre-crisis, post-2008 adjustment, pre-pandemic and post-pandemic), to discern how both cases reacted to significant economic disturbances, and what policy variables were most closely linked to growth outcomes. The results suggest that the United States has probably achieved a superior relative economic performance, due to its policy mix characterised by lower tax burdens, more rapid fiscal adjustments and broader monetary expansion. Conversely, the European Union’s elevated tax levels, increased public spending and slower policy adjustments were correlated with lower GDP per capita growth and extended recovery periods. These findings were based on the results of high P-value and low R, as well as squared results of OLS regression. At the same time, considerations of autocorrelation and multicollinearity have been taken into account.

The main purpose of this article is twofold. The first objective is to follow the main trends in the development in the Latvian’s monetary policy and the European Monetary system accession process, with a focus on the local currency stability problems. It discusses the process and strategies for choice of the strategy as well as the main issues that have arisen in the accession process. The second objective of this article is to investigate the on-going monetary policy of the Bank of Latvia, to analyse the basic principles of its operations and influence on national economic growth. Both objectives fully corresponding to the article’s research object, i.e. to a monetary policy of the Bank of Latvia. Regarding the developed countries the general monetary policy objectives deals not only with maintenance of stability of the exchange rate and general price level, but also with stimulation of economic development, growth of employment and incomes of the citizens. The period from 2003 till 2010 is being investigated. We use a wide range of research methods, such as: grouping method, method of comparison of financial ratios and etc.

Iceland is a small, resource rich country in Europe that is highly dependent on foreign trade. According to the World Bank classifications, Iceland is a high income economy, but with a population of a little bit more than 300 thousand inhabitants, is the smallest economy within the Organization for Economic Co-operation and Development (OECD). Iceland is highly dependent on foreign trade, especially on trade with the European Union, where economic and political integration is evolving and the question about the most feasible level of participation is a future challenge for the country. Iceland is a member of the European Free Trade Association (EFTA), the European Economic Area (EEA) and the Schengen area, and the European Union (EU) candidate country until recently, when its government decided to withdraw its EU membership application. Currently, the EEA agreement ensures Iceland access to the EU common market. The question remains, what is the most feasible arrangement for Iceland’s prosperity in the long term? Should it continue to rely on the current arrangement? Should it seek the EU membership in the future and, perhaps, subsequently become part of the Euro Area? What are the possible benefits and disadvantages for Iceland joining the EU and the Euro Area?