Iceland: Selected Issues

August 29, 2007

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Format: Chicago

Iceland: Selected Issues, (USA: International Monetary Fund, 2007) accessed November 29, 2024

Summary

This Selected Issues paper estimates the gap between the real effective exchange rate (REER) and its equilibrium (medium-term) value. The paper explores certain features of fiscal policy in Iceland, and examines various aspects of fiscal frameworks in other European countries that are possibly worthy of emulation. It provides a detailed summary of the key issues affecting fiscal policy in Iceland. It argues that political economy factors lead to procyclical fiscal trends, and this is exacerbated by macroeconomic volatility. The paper also provides an overview of the structure of the banking sector of Iceland.

Subject: Banking, Currencies, Expenditure, Fiscal policy, Foreign exchange, International trade, Money, Real effective exchange rates, Trade balance

Keywords: Adjustment change, Asia and Pacific, Baltics, Carry trade, CR, Currencies, ES approach, Europe, Expenditure ceiling, Global, Iceland, Interest rate channel, ISCR, Monetary policy transmission mechanism, Norm decrease, Real effective exchange rates, Trade balance

Publication Details

Pages:

44
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2007/296
Stock No:

1ISLEA2007003
ISBN:

9781451819366
ISSN:

1934-7685

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