Lessons From Iceland's Economic Crisis

Post by "CavalierZee"



As the first country to experience the full force of the global economic crisis, Iceland is now held up as an example by some of how to overcome deep economic dislocation without undoing the social fabric. Professor Stiglitz discusses lessons learned.

In this video he highlights Iceland's divergence from other countries with IMF programs: 

- It did not have the depth of austerity usually experienced by debt-ridden nations
- It was more transparent and engaged with citizens
- It was less contractionary than other countries
- It was more supportive of capital controls
- It allowed the government to set it's own framework
- It was very supportive of its restructuring

Stiglitz has some suggestions for other countries which are in crisis:  

"It would have been wrong to burden future generations with the mistakes of of the financial system, and the failure of the UK and Netherlands to adequately regulate. And I think one of the lessons for Europe is that the Single Market principle needs to be questioned."

And in reply to 'What could have been done differently?' he ends with, "My proclivity to say is that it could have done with a little less austerity."