The Danger of a “Geyser Disease” Effect: Structural Fragility of the Tourism-Led Recovery in Iceland
The fall of the Icelandic economy in 2008 highlighted the destructive effects of unbridled markets. Yet, in recent years Iceland’s annual growth rates have been significantly higher than those of the overwhelming majority of advanced capitalist countries. The aim of this article is to delve into the...
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crsagepubl:10.1177/0486613419867415 2024-10-13T14:08:24+00:00 The Danger of a “Geyser Disease” Effect: Structural Fragility of the Tourism-Led Recovery in Iceland Macheda, Francesco Nadalini, Roberto 2019 http://dx.doi.org/10.1177/0486613419867415 http://journals.sagepub.com/doi/pdf/10.1177/0486613419867415 http://journals.sagepub.com/doi/full-xml/10.1177/0486613419867415 en eng SAGE Publications http://journals.sagepub.com/page/policies/text-and-data-mining-license Review of Radical Political Economics volume 52, issue 1, page 50-76 ISSN 0486-6134 1552-8502 journal-article 2019 crsagepubl https://doi.org/10.1177/0486613419867415 2024-09-17T04:38:38Z The fall of the Icelandic economy in 2008 highlighted the destructive effects of unbridled markets. Yet, in recent years Iceland’s annual growth rates have been significantly higher than those of the overwhelming majority of advanced capitalist countries. The aim of this article is to delve into the fragile foundations that the current Icelandic economic boom rests on. We argue that the impressive appreciation of the Icelandic króna, triggered by the rapid expansion of tourism, has made the rapid absorption of unemployment compatible with price stability during the recovery period. By restricting sources of international competitiveness, however, this tourism-led recovery strategy will render the current level of unemployment and real wages inconsistent with internal and external equilibrium in the long run. JEL classification: E24, F31, J24, O33, B51 Article in Journal/Newspaper Iceland SAGE Publications Review of Radical Political Economics 52 1 50 76 |
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SAGE Publications |
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English |
description |
The fall of the Icelandic economy in 2008 highlighted the destructive effects of unbridled markets. Yet, in recent years Iceland’s annual growth rates have been significantly higher than those of the overwhelming majority of advanced capitalist countries. The aim of this article is to delve into the fragile foundations that the current Icelandic economic boom rests on. We argue that the impressive appreciation of the Icelandic króna, triggered by the rapid expansion of tourism, has made the rapid absorption of unemployment compatible with price stability during the recovery period. By restricting sources of international competitiveness, however, this tourism-led recovery strategy will render the current level of unemployment and real wages inconsistent with internal and external equilibrium in the long run. JEL classification: E24, F31, J24, O33, B51 |
format |
Article in Journal/Newspaper |
author |
Macheda, Francesco Nadalini, Roberto |
spellingShingle |
Macheda, Francesco Nadalini, Roberto The Danger of a “Geyser Disease” Effect: Structural Fragility of the Tourism-Led Recovery in Iceland |
author_facet |
Macheda, Francesco Nadalini, Roberto |
author_sort |
Macheda, Francesco |
title |
The Danger of a “Geyser Disease” Effect: Structural Fragility of the Tourism-Led Recovery in Iceland |
title_short |
The Danger of a “Geyser Disease” Effect: Structural Fragility of the Tourism-Led Recovery in Iceland |
title_full |
The Danger of a “Geyser Disease” Effect: Structural Fragility of the Tourism-Led Recovery in Iceland |
title_fullStr |
The Danger of a “Geyser Disease” Effect: Structural Fragility of the Tourism-Led Recovery in Iceland |
title_full_unstemmed |
The Danger of a “Geyser Disease” Effect: Structural Fragility of the Tourism-Led Recovery in Iceland |
title_sort |
danger of a “geyser disease” effect: structural fragility of the tourism-led recovery in iceland |
publisher |
SAGE Publications |
publishDate |
2019 |
url |
http://dx.doi.org/10.1177/0486613419867415 http://journals.sagepub.com/doi/pdf/10.1177/0486613419867415 http://journals.sagepub.com/doi/full-xml/10.1177/0486613419867415 |
genre |
Iceland |
genre_facet |
Iceland |
op_source |
Review of Radical Political Economics volume 52, issue 1, page 50-76 ISSN 0486-6134 1552-8502 |
op_rights |
http://journals.sagepub.com/page/policies/text-and-data-mining-license |
op_doi |
https://doi.org/10.1177/0486613419867415 |
container_title |
Review of Radical Political Economics |
container_volume |
52 |
container_issue |
1 |
container_start_page |
50 |
op_container_end_page |
76 |
_version_ |
1812815088468361216 |