Lithuania was not materially better in terms of fiscal management, but was lucky to lag behind in terms of the economic cycle, which resulted in a less overheated economy before the crisis took off. Estonia, however, showed much more prudence in pursuing countercyclical policies accumulating considerable liquidity cushion to support economy during the downturn.
The reversal of the Danish economy emphasises how difficult it is to finetune the economy by means of fiscal policy. Our knowledge is incomplete. It takes time to prepare fiscal-policy measures, and it takes time before they have an impact on unemployment. Such measures can easily have a disruptive effect on the economy when the underlying cyclical factors are uncer-tain and changing.