OECD economic surveys. Iceland / OECD.

Format:

Book

Author/Creator:

Organisation for Economic Co-operation and Development, author.

Language:

English

Subjects (All):

Iceland--Economic conditions--21st century.

Iceland.

Physical Description:

1 online resource (102 pages) : illustrations

Place of Publication:

Paris : OECD, [2015]

Summary:

Special features: Promoting stability and resilience; supporting long-run growth.

Contents:

Intro

Table of contents

Basic statistics of Iceland, 2014

Executive summary

Main findings

Iceland's economic prospects are good, but capital controls and wage increases are key challenges

Output has recovered

Fiscal policy has become more sustainable, but contingent liabilities remain a risk

The budget deficit has been eliminated

Barriers to entrepreneurship, lack of competition and weaknesses in education undermine productivity

Barriers to entrepreneurship are high

Key recommendations

Lifting capital controls while preserving stability

Securing fiscal sustainability

Setting the course for productivity growth

Assessment and recommendations

Figure 1. Output is recovering comparatively strongly

The recovery from the crisis is well underway

Figure 2. Investment slumped after the crisis

Figure 3. Wage and price inflation

Figure 4. The economy is normalising

Table 1. Iceland: Macroeconomic indicators and projections

Box 1. Vulnerabilities for the outlook

Box 2. Collective bargaining in Iceland

Lifting capital controls while preserving financial stability

Low inflation is threatened by high wage settlements

Bolstering macro-prudential policy and prudential regulation

Recommendations for lifting capital controls while preserving financial stability

Securing long-term fiscal sustainability

Figure 5. Public finances have improved

Figure 6. Simulations of public debt paths

Sizeable pressures on fiscal policy remain

Adopting a new fiscal framework

Better targeting fiscal policy

Figure 7. VAT performance could be improved

Figure 8. Disability rolls are rising

Recommendations for fiscal policy sustainability

Supporting long-term productivity growth

Figure 9. GNI per capita is slightly above average

Box 3. Well-being in Iceland.

Figure 10. Well-being is high in Iceland

Figure 11. Productivity developments in Iceland

Improving product market regulation

Figure 12. Barriers to entrepreneurship is relatively restrictive in areas

Figure 13. Firm creation has slowly recovered and bankruptcies increased

Harnessing competitive pressures

Figure 14. Iceland's service trade restrictiveness index across sectors

Strengthening corporate governance

Strengthening skills on the labour market

Figure 15. Education: Room for improvement

Remuneration and the business environment

Figure 16. Wages are compressed

Using natural resources while respecting the environment

Figure 17. GHG emissions are beginning to fall

Recommendations for strengthening long-term productivity growth

Bibliography

Annex. Progress in structural reform

Economic rebalancing

Capital controls, monetary policy framework and financial stability

Fiscal consolidation

Government expenditure efficiency

Green growth

Thematic chapters

Chapter 1. A policy framework to promote stability and resilience

Promoting stability and improving resilience without capital controls

Figure 1.1. The financial boom and its aftermath reshuffled resources between sectors

Figure 1.2. Business cycles produce considerable swings in economic outcomes

Box 1.1. Iceland's status under the OECD Codes of Liberalisation

Figure 1.3. Iceland is recovering comparatively strongly

Figure 1.4. The króna has been trading at a discount in offshore markets

Figure 1.5. Capital controls have pushed down pension funds' foreign asset holdings

The road forward

Figure 1.6. Offshore króna holdings remain large in relation to GDP

Figure 1.7. Composition of the failed banks' assets

Figure 1.8. Iceland's international investment position has improved markedly.

Monetary policy after the removal of capital controls

Figure 1.9. Icelandic inflation has generally been high

Figure 1.10. Macroeconomic outcomes have been comparatively volatile

Figure 1.11. Inflation is sensitive to fluctuations in the króna exchange rate

Figure 1.12. Domestic foreign exchange borrowing surged before the crisis

Figure 1.13. Inflation targeting does not appear to have anchored expectations

Fine-tuning the inflation-targeting framework

Figure 1.14. Real-time estimates of the Icelandic output gap can be misleading

Figure 1.15. Breakeven inflation measures suggest that expectations are not firmly anchored

Figure 1.16. Official reserves have been bolstered

Building a prudential framework to support macroeconomic stability

Authorities have made progress in strengthening the financial stability framework

Figure 1.17. Iceland's financial stability framework

Figure 1.18. Higher capital adequacy requirements have had little influence on bank lending rates

Additional steps to strengthen the prudential environment

Macroprudential policy tools and implementation

Figure 1.19. House prices are accelerating relative to valuation benchmarks

Fiscal policy

Figure 1.20. Spreads for Icelandic treasuries have narrowed

Figure 1.21. Public finances are recovering from the crisis

A fiscal framework is needed to lock in budgetary discipline

Box 1.2. Main provisions of the Organic Budget Law

Figure 1.22. Simulations of public debt paths

Recommendations for promoting macroeconomic stability and resiliency

Chapter 2. Supporting long-term growth by improving the business environment

Figure 2.1. GNI per capita is slightly above average

Iceland's business sector

Table 2.1. Share of different sectors in GDP.

Figure 2.2. Marine products are shrinking as a share of exports

Regulation is uneven

Figure 2.3. Product market regulation

Barriers to entry

Figure 2.4. Barriers to entry are somewhat more restrictive than the OECD average

Foreign direct investment

Regulatory burdens should be reduced further

Competition can boost productivity

Figure 2.5. GDP per hour worked has stagnated since the crisis

Box 2.1. Limits to public policy in a small open economy

Figure 2.6. Iceland's services trade restrictiveness index by sector

Labour and human capital influences on productivity

Financing remains difficult

Interest rates

Table 2.2. Long-term interest rates in various countries

Figure 2.7. Corporate debt mushroomed before the crisis

Public policies to foster innovation and start-ups

Innovation activities of Icelandic firms

Figure 2.8. Small firms are often innovative

Table 2.3. R&D activity in Nordic countries

Figure 2.9. Administrative burdens and opportunity entrepreneurs

Motivations for starting a business

Supporting firm creation and entrepreneurship

Figure 2.10. Public funding of business R&D is high

Recommendations: Setting the course for productivity growth

References.

Notes:

Description based on print version record.

ISBN:

92-64-24049-7

OCLC:

1024234135