Inflation and Disinflation in Iceland
Author: Palle Schelde Andersen
Publisher:
Published: 1998
Total Pages: 66
ISBN-13:
DOWNLOAD EBOOKRead and Download eBook Full
Author: Palle Schelde Andersen
Publisher:
Published: 1998
Total Pages: 66
ISBN-13:
DOWNLOAD EBOOKAuthor: International Monetary Fund
Publisher: International Monetary Fund
Published: 2001-06-12
Total Pages: 57
ISBN-13: 1451819250
DOWNLOAD EBOOKThe abolition of the fluctuation bands by the Icelandic government is seen as the final step of a consistent and gradual move toward increased exchange rate flexibility. Supplemented by the adoption of an inflation targeting regime, the new monetary policy framework should suit Iceland better. Iceland's new monetary policy framework has been introduced against a backdrop of a sound legal environment. The institutional and operational framework of the inflation targeting regime is well defined. The statistical data on the economic indices of Iceland are presented.
Author: Palle Schelde Andersen (deceased)
Publisher:
Published: 2013
Total Pages: 0
ISBN-13:
DOWNLOAD EBOOKIceland was a high inflation country from the second half of the seventies and until the middle of the eighties. During the middle of the nineties inflation in Iceland, at less than 2% p.a., was among the lowest in the OECD. In this paper we analyse the roots of high inflation in Iceland and the subsequent disinflation episode. We find that high inflation in Iceland was caused by an increased frequency of external shocks, a tight labour market and a stronger devaluation bias. We further find that disinflation took place in two stages. The first was initiated in 1983 by a policy package of statutory incomes policy and a firmer commitment to exchange rate stability as a response to an inflation crisis. It reduced inflation from the high to the moderate range at negligible cost in terms of output and employment. The second stage took place during the early nineties and reduced inflation from the moderate range to below 3% p.a.. It involved more fundamental changes in policy priorities and public attitudes than the first stage and is more unique in the international context. It was also more costly in terms of output and employment than the first stage, although the costs seem to have been rather small compared to some other countries. A relatively high degree of real wage flexibility, the use of incomes policy, widespread financial indexation and, above all, a broadly based consensus that the general public was best served by low inflation all contributed to this outcome.
Author: Thórarinn G. Pétursson
Publisher:
Published: 2018
Total Pages: 28
ISBN-13:
DOWNLOAD EBOOKAuthor: Ms.Keiko Honjo
Publisher: INTERNATIONAL MONETARY FUND
Published: 2006-11-01
Total Pages: 0
ISBN-13: 9781451865226
DOWNLOAD EBOOKThis paper provides some empirical estimates on how tightly is it feasible to control inflation in a very small open economy such as Iceland. Estimated macroeconomic models of Canada, Iceland, New Zealand, the United Kingdom, and the United States are used to derive efficient monetary policy frontiers that trace out the locus of the lowest combinations of inflation and output variability that are achievable under a range of alternative monetary policy rules. These frontiers illustrate that inflation stabilization is more challenging in Iceland than in other industrial countries primarily because of the relative magnitudes of the economic shocks.
Author: International Monetary Fund. European Dept.
Publisher: International Monetary Fund
Published: 2016-06-22
Total Pages: 23
ISBN-13: 1498314228
DOWNLOAD EBOOKThis paper examines Iceland’s expenditure policy, especially five expenditure pressure points, as well as capital flows and monetary policy effectiveness in small open economies. The postcrisis fiscal adjustment demanded painful choices, with spending on healthcare, education, and investment suffering cuts in real terms. While expenditures in these areas have rebounded more recently, there is a room for further decompression. Using quarterly panel data for 18 advanced and emerging small open economies during 2002–15, it finds that monetary policy is focused on inflation developments, but also that domestic interest rates affect capital flows, raising concerns about a reinforcing loop between monetary policy and capital flows.
Author: International Monetary Fund
Publisher: INTERNATIONAL MONETARY FUND
Published: 2006-08-08
Total Pages: 44
ISBN-13: 9781451819335
DOWNLOAD EBOOKGiven its small size and openness, the Icelandic economy has been subject to large shocks. Systematic coordination of monetary and fiscal policy, however, could help improve the inflation-output variability trade-off. The fiscal rule is designed to simultaneously ensure a consistently countercyclical fiscal stance and achieve a stable public debt target. The parameter values of the model are estimated from the quarterly data using a Bayesian technique. To assess how the introduction of the fiscal policy changes the inflation-output variability trade-off in Iceland, the paper compares the efficiency policy frontiers.
Author: Thórarinn G. Pétursson
Publisher:
Published: 1995
Total Pages: 35
ISBN-13:
DOWNLOAD EBOOKAuthor: International Monetary Fund
Publisher: INTERNATIONAL MONETARY FUND
Published: 2002-07-03
Total Pages: 18
ISBN-13: 9781451819236
DOWNLOAD EBOOKThis Selected Issues paper reports on the technical aspects of the model-based inflation forecasts of the Central Bank of Iceland (CBI) and the monetary transmission mechanism in Iceland. The paper summarizes the structure and results of time series models employed by the CBI to forecast inflation and quantify lags in the transmission of monetary policy changes. The paper also briefly discusses recent inflation trends, including the IMF staff's estimate of the exchange rate pass-through. The paper presents some remarks on potential distortions in the financial market pass-through of monetary policy changes.