The Dutch Disease in Reverse: Iceland's Natural Experiment
For a long time, abundant natural resources brought Iceland a high and volatile real exchange rate with adverse effects on manufacturing and services. During 2003-2008, another national treasure, the sovereign’s AAA rating, was used by privatized banks to attract foreign capital, elevating the real...
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Munich: Center for Economic Studies and ifo Institute (CESifo)
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ftzbwkiel:oai:econstor.eu:10419/167499 2024-01-21T10:07:20+01:00 The Dutch Disease in Reverse: Iceland's Natural Experiment Gylfason, Thorvaldur Zoega, Gylfi 2017 http://hdl.handle.net/10419/167499 eng eng Munich: Center for Economic Studies and ifo Institute (CESifo) Series: CESifo Working Paper No. 6513 gbv-ppn:890692920 http://hdl.handle.net/10419/167499 RePec:ces:ceswps:_6513 http://www.econstor.eu/dspace/Nutzungsbedingungen ddc:330 F41 O23 O33 natural resource curse Dutch disease financial crisis doc-type:workingPaper 2017 ftzbwkiel 2023-12-25T00:44:33Z For a long time, abundant natural resources brought Iceland a high and volatile real exchange rate with adverse effects on manufacturing and services. During 2003-2008, another national treasure, the sovereign’s AAA rating, was used by privatized banks to attract foreign capital, elevating the real exchange rate even further. The financial collapse and the associated collapse of the currency in 2008 left the country with a large foreign debt which offset some of the effect of the natural resources on the real exchange rate. In effect, this was the Dutch disease in reverse as witnessed, in particular, by a massive increase in the number of tourists following the financial collapse. This paper discusses the behavior of the exchange rate of the Icelandic króna before and after 2008 as well as its relationship to natural resources, capital flows, output, exports and imports, including tourism. Report Iceland EconStor (German National Library of Economics, ZBW) |
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EconStor (German National Library of Economics, ZBW) |
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ftzbwkiel |
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English |
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ddc:330 F41 O23 O33 natural resource curse Dutch disease financial crisis |
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ddc:330 F41 O23 O33 natural resource curse Dutch disease financial crisis Gylfason, Thorvaldur Zoega, Gylfi The Dutch Disease in Reverse: Iceland's Natural Experiment |
topic_facet |
ddc:330 F41 O23 O33 natural resource curse Dutch disease financial crisis |
description |
For a long time, abundant natural resources brought Iceland a high and volatile real exchange rate with adverse effects on manufacturing and services. During 2003-2008, another national treasure, the sovereign’s AAA rating, was used by privatized banks to attract foreign capital, elevating the real exchange rate even further. The financial collapse and the associated collapse of the currency in 2008 left the country with a large foreign debt which offset some of the effect of the natural resources on the real exchange rate. In effect, this was the Dutch disease in reverse as witnessed, in particular, by a massive increase in the number of tourists following the financial collapse. This paper discusses the behavior of the exchange rate of the Icelandic króna before and after 2008 as well as its relationship to natural resources, capital flows, output, exports and imports, including tourism. |
format |
Report |
author |
Gylfason, Thorvaldur Zoega, Gylfi |
author_facet |
Gylfason, Thorvaldur Zoega, Gylfi |
author_sort |
Gylfason, Thorvaldur |
title |
The Dutch Disease in Reverse: Iceland's Natural Experiment |
title_short |
The Dutch Disease in Reverse: Iceland's Natural Experiment |
title_full |
The Dutch Disease in Reverse: Iceland's Natural Experiment |
title_fullStr |
The Dutch Disease in Reverse: Iceland's Natural Experiment |
title_full_unstemmed |
The Dutch Disease in Reverse: Iceland's Natural Experiment |
title_sort |
dutch disease in reverse: iceland's natural experiment |
publisher |
Munich: Center for Economic Studies and ifo Institute (CESifo) |
publishDate |
2017 |
url |
http://hdl.handle.net/10419/167499 |
genre |
Iceland |
genre_facet |
Iceland |
op_relation |
Series: CESifo Working Paper No. 6513 gbv-ppn:890692920 http://hdl.handle.net/10419/167499 RePec:ces:ceswps:_6513 |
op_rights |
http://www.econstor.eu/dspace/Nutzungsbedingungen |
_version_ |
1788697894595854336 |