Back From the Brink: Iceland's Successful Economic Recovery

Bent Sofus Tranøy, Olaf Sigurjonsson

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Abstract

The story of Iceland’s successful economic recovery from financial meltdown in 2008 is different from the rest of this book. Temporally, it deals with a dramatic episode of crisis management, not ongoing public policy. Furthermore, while the typical policy success refers to a circumscribed programme, a full-scale economic crisis demands that fires are put out all over the place. Iceland had to deal with foreign policy, the IMF, financial, economic and social issues, simultaneously. To do so it combined Keynesian crisis fighting means such as propping up demand and capital controls We deem Iceland’s ability to stop the largest financial meltdown in history (relative to GDP) from wreaking lasting real economic damage a policy success along all four dimensions specified by the (PPPE)-framework, although the political success experienced by those who handled most of the clean-up job turned out to be more precarious than what they would have hoped for.
Original languageEnglish
Title of host publicationSuccessful Public Policy in the Nordic Countries : Cases, Lessons, Challenges
EditorsCaroline de la Porte, Guðný Björk Eydal, Jaakko Kauko, Daniel Nohrstedt, Paul 't Hart, Bent Sofus Tranøy
Number of pages21
Place of PublicationOxford
PublisherOxford University Press
Publication date2022
Pages388-408
Chapter19
ISBN (Print)9780192856296
ISBN (Electronic)9780191946714
DOIs
Publication statusPublished - 2022

Keywords

  • Iceland
  • Economic crisis
  • Economic recovery
  • IMF
  • Capital controls
  • Keynesian

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