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Kr. Valdemara str. 33
Office 11 (entrance from courtyard)
Phone: +371 67218043
Fax: +371 67218045
info@bccl.lv |
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| February 20 |
| Anita Kaleja at the BCCL Platinum and Sterling Breakfast with the Economist |
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In 1921, a great book was published by arguably the greatest economist of the 20th century, John Maynard Keynes. A Treatise on Probability outlined a clear distinction between 2 kinds of probablilities: a subjective and an objective probability. Let me explain why this distinction is important today.
Latvia is facing a potential crisis. We can look at our dreadful situation from 2 perspectives: if we follow the suggestion of our prime minister Mr. Godmanis and the head of the Latvian Central Bank Mr. Rimšēvics, then we have to conclude that the crisis is a matter of subjective probability. They have clearly stated that the crisis is in our minds and manifests itself as a self imposed prophecy. Our anticipations in a sense shape the future as it unfolds. On the other hand, we can look at the situation from the point of view of an objective probability. That is to say, we can look at our economy developing as a balance of certain interests.
I am proud to introduce Mr Aidan Manktelow, the deputy editor of risk briefing of the Economist. Mr. Manktelow has previously worked as an analyst for the Oxford Analytica network of experts dealing in risk assessment. His main tool has been the global stress point matrix, a unique programme assessing the stress balance of different interests in various regions of the world. I trust that Mr. Manktelow has a lot to say about probabilities both objective and subjective.
I now hand over to Mr. Manktelow to address the subject of the impact of a global downturn on Latvia. I hope that in his speech he will help us to understand as to whether the potential crisis in Latvia is a matter of subjective or objective probability. Is the downturn in our minds or is it a matter of interests where the human factor plays no role.
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