Re-visiting: “Towards a new monetary regime for Iceland”
The question of what is the best monetary policy regime for Iceland has come up in the Icelandic election campaign and particularly it has been suggested that Iceland introduce a currency board.
It is well-known that I am not a major fan of pegged exchange rates but there is also a trade-off in choosing the “optimal” monetary policy regime between on the one hand having a strongly rule-based regime and having the “correct” anchor.
I discussed these issues at a seminar in Iceland hosted by Islandsbanki back in early 2015.
See my presentation “Towards a new Monetary Regime for Iceland” here (after 15 minutes)