The unemployment rose as high as 18.4% in 2010. It's now at 13.2% and dropping. Their situation with unemployment is unique, as people were leaving the labor force due to migrating to other EU nations. The decrease in the unemployment rate is merely due to people migrating back because the economy is improving.
I haven't been tracking unemployment in Lithuania by quarter as your graph displayed.
I did find a time series at
LITHUANIA GDP GROWTH RATE | LATEST DATA | FORECAST | NEWS. I could not spot the source of the data but it looks to me like it is probably Eurostat. Regardless of time intervals used, there was an uptick in unemployment in 2012 and a drop in growth at the end of 2012, so any positive effects of "austerity" seem to be either second-order or very uneven.
As to emigration and unemployment figures, I fail to see how Lithuania is "unique" as this phenomena is common to all of the smaller economies in the EU periphery. I'm puzzled by your last sentence: I can see in-migration as the economy improves, but why does that explain a decreasing unemployment rate? Isn't a simpler explanation that economic growth lowers unemployment directly and is partially offset by in-migration increasing the labor force?
The drop in the unemployment rate is partially due to people migrating out of the country. As the economy gets better, more people migrate back to the country. Unemployment ticks up a bit, and has leveled off at 13% for a year. But the labor force is increase which is a signal of a job market improving. The world bank has the participation rate at 54 percent, on an upward trend. In 2008, the participation rate was last seen at 51.30.
Finally, you failed to respond to the point that Lithuania had exceptionally strong growth before the economic downturn, and a return to a portion of that growth rate and a higher growth rate than other neighboring countries is not proof of any particular policy on the part of Lithuania as much as it is a testament to Lithuania's strong economic underpinnings to begin with.
Lithuania has similar growth trends before and after the recession to that of the United States and other nations. Many things could have attributed to that growth. Most likely asset bubbles. The average growth rate for the US from 2004 to 2007 was 3%. Now from 2009 to 2013 the average is just under 2%. You can't go back to sound economic fundamentals, and expect to keep bubble GDP levels. It doesn't work that way.
The collapse of GDP in Lithuania was truly epic, a 14.8% drop in 2009 (compared to a drop of 4.3% for the EU-27 and Eurozone as a whole, a drop of 3.1% in the US, and a growth of 1.6% for neighboring Poland). Lithuania has outperformed the EU average except in 2009 and 2010, and has outperformed the US growth figures, except for the same two years. Eurostat's growth estimates for Lithuania for 2014 is 3.6%, a percentage point above the US and over two points above the EU average. But countries with smaller economies and lower relative GDP should be growing faster. Lithuania in 2007 had only reached 59% of the EU average GDP (better than the 40% of average in 2000!), Latvia and Estonia did better in that time period (Latvia from 36% to 57%; Estonia from 45% to 70%). And guess what? Lithuania's projected 2014 growth rate is below Latvia, Estonia, Slovakia, and Turkey. If Lithuania is the "only" European nation following true austerity, why can't it perform as well as its nearest neighbors?
Those countries Governments are just spending more money. Slovakia had a 20% increase from Q3 - Q4 in 2012. Turkey had a 23 percent increase at the same time period. Latvia had a 19% increase and Estonia had a 30% increase. Constant that to Lithuania who is only increasing spending by 10%.
You want to get your GDP to grow, just increase Government Consumption. Because, you know, that really makes a difference or anything...
Give me a break! That "Government distorts and manipulates Government Data" line is a lie and an insult. You don't like the data so you cry foul. No responsible person regardless of position would raise that argument. You should be ashamed of yourself.
No need for me to be ashamed, unless it's true. The Government distorts economic data. It's not a secret.
It does it with unemployment. You think any other country in the world uses this U-3, U-5 crap that the BLS uses? They don't. They just calculated the unemployment rate, and that's it. The U-3 is not the real unemployment rate. It's just the unemployment rate the Government wants to look at. It makes structural problems regarding the economy not look as bad.
The Government distorts inflation data, and has been doing it for centuries. In the 1970's, the Government took housing prices out of the CPI and replaced it with rents. In the 1980's, they've introduced a chain-weighted component. In the 90's, they've added something called hedonic adjustments and substitutions, which make inflation hardly detectable. There is really no way inflation today is 2% annually. If anything, inflation (if measured originally) should be very close to the inflation of the 1970's.
And now, the Government is going to distort it's GDP data by including "Intangibles" in the investment side of the GDP metric. Just so the GDP can have a bigger number and growth can appear more robust. Keep in mind, not a single country n the world computes GDP this way. So when you compare another country's GDP to ours, it won't even be an apples to apples comparison.
Manipulating data is the only economic trick the US has under it's hat. People are complaining about unemployment? Change the numbers. People complaining about rising prices? Distort the data. People complaining about the debt to GDP ratio? Make the figures up. Because lying to ourselves will make the problems go away.
BTW where do your figures come from? I notice you don't bother to source them. I'm just curious, most folks use Eurostat. Do you regard Eurostat as more reliable, less reliable, or equally reliable than the US statistics? And if you are using statistics from somewhere else than Eurostat, how reliable do you think they are compared to Eurostat?
I just Googled the Lithuanian unemployment rate. Some sources say different things. Google fiance has it at 13.8% while wikipedia had it as low as 9%, as early as 2012. Eurostat looks like a makeshift Wikipedia page to me, so I don't use it. I have an account at Trading economics, so it goes back as far as I need it to and I can export data to create my own charts. They get their data from all over, IMF, World Bank, Government agencies and CIA.
Exactly. So how do you know the improvement in growth forecast for 2013 and 2014 is the result of austerity and not the increase in wages? Traditional macrotheory would argue that increasing wages, especially among the lowest paid workers, is a strong stimulus in a depressed economy. It was a big issue in America and Europe in the 1930's. Wage increases and similar measures have a much stronger foundation in economic theory than austerity as a stimulative policy and the historical record and current experience seems to bear this out.
The situation with America was different. America was still in the mist of the Depression. Lithuania already recovered. The austerity period already happened. Wage increases were frozen for five years and the first minimum wage was agreed upon in 2012. Whatever reckless policies they choose to enact is up to them.
They do still kill homos right?
