Icelandic policy has been sub-optimal for two decades – research
Central bank set rates too high post-GFC and should have eased quicker, paper suggests
The Central Bank of Iceland has released a paper critiquing its policy decisions over the past two decades.
The study, published on July 29, examines the country’s monetary policy between 2006 and 2025.
The authors – Birta Haraldsdóttir and Bjarni Einarsson, both economists at the central bank – say that since Iceland adopted a formal inflation target in 2001, price growth “has frequently exceeded the target and has been more volatile than [in] many other inflation-targeting countries”.
The
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