To recapitulate, I would like to stress once more that since Latvia’s accession to the European Union one of the main tasks shared by the Bank of Latvia and other state institutions is to ensure that Latvia join the euro area in a timely and balanced manner and to replace the lats with the euro.
Similarly, when a firm’s production can’t keep pace with demand, prices move up in an attempt to restore balance. But while conceptually appealing, accurately measuring potential output is a formidable task.