The Rise and Fall of the Icelandic Economy

Iceland became the first developed country in 30 years to request help from the IMF in 2009. While the depths of its recent recession are well studied, the causes of its origin are still misunderstood. This paper looks at two factors: (1) the blanket guarantees provided to the Icelandic banking syst...

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Bibliographic Details
Main Author: Howden, David
Format: Report
Language:English
Published: 2013
Subjects:
E3 - Prices
Business Fluctuations
and Cycles
Iceland
Online Access:https://mpra.ub.uni-muenchen.de/79603/
https://mpra.ub.uni-muenchen.de/79603/1/MPRA_paper_79603.pdf
id ftmpra:oai::79603
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spelling ftmpra:oai::79603 2023-05-15T16:45:14+02:00 The Rise and Fall of the Icelandic Economy Howden, David 2013 application/pdf https://mpra.ub.uni-muenchen.de/79603/ https://mpra.ub.uni-muenchen.de/79603/1/MPRA_paper_79603.pdf en eng https://mpra.ub.uni-muenchen.de/79603/1/MPRA_paper_79603.pdf Howden, David (2013): The Rise and Fall of the Icelandic Economy. Published in: The Journal for Social, Political, and Economic Studies , Vol. 4, No. 38 (2013): pp. 389-424. E3 - Prices Business Fluctuations and Cycles MPRA Paper NonPeerReviewed 2013 ftmpra 2023-04-09T04:57:58Z Iceland became the first developed country in 30 years to request help from the IMF in 2009. While the depths of its recent recession are well studied, the causes of its origin are still misunderstood. This paper looks at two factors: (1) the blanket guarantees provided to the Icelandic banking system by various public agencies, and which fostered an environment of excessive risk taking; (2) a faulty inflation-targeting framework by the Central Bank of Iceland, which resulted in a credit binge engulfing the small island. While the first factor explains why Iceland´s banking sector grew as large as it did, the second accounts for the magnitude of the imbalances in both the real and financial sectors. Report Iceland Munich Personal RePEc Archive (MPRA - Ludwig-Maximilians-University Munich)
institution Open Polar
collection Munich Personal RePEc Archive (MPRA - Ludwig-Maximilians-University Munich)
op_collection_id ftmpra
language English
topic E3 - Prices
Business Fluctuations
and Cycles
spellingShingle E3 - Prices
Business Fluctuations
and Cycles
Howden, David
The Rise and Fall of the Icelandic Economy
topic_facet E3 - Prices
Business Fluctuations
and Cycles
description Iceland became the first developed country in 30 years to request help from the IMF in 2009. While the depths of its recent recession are well studied, the causes of its origin are still misunderstood. This paper looks at two factors: (1) the blanket guarantees provided to the Icelandic banking system by various public agencies, and which fostered an environment of excessive risk taking; (2) a faulty inflation-targeting framework by the Central Bank of Iceland, which resulted in a credit binge engulfing the small island. While the first factor explains why Iceland´s banking sector grew as large as it did, the second accounts for the magnitude of the imbalances in both the real and financial sectors.
format Report
author Howden, David
author_facet Howden, David
author_sort Howden, David
title The Rise and Fall of the Icelandic Economy
title_short The Rise and Fall of the Icelandic Economy
title_full The Rise and Fall of the Icelandic Economy
title_fullStr The Rise and Fall of the Icelandic Economy
title_full_unstemmed The Rise and Fall of the Icelandic Economy
title_sort rise and fall of the icelandic economy
publishDate 2013
url https://mpra.ub.uni-muenchen.de/79603/
https://mpra.ub.uni-muenchen.de/79603/1/MPRA_paper_79603.pdf
genre Iceland
genre_facet Iceland
op_relation https://mpra.ub.uni-muenchen.de/79603/1/MPRA_paper_79603.pdf
Howden, David (2013): The Rise and Fall of the Icelandic Economy. Published in: The Journal for Social, Political, and Economic Studies , Vol. 4, No. 38 (2013): pp. 389-424.
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