Wednesday, August 02, 2006


Iceland Is Interesting

The Icelandic economy has been in the news a lot recently. I guess everyone has already read something or other about this, if not Claus has a post here (and here) which gives background and links.

Now basically up till today I had given the Iceland 'problem' a rather wide birth, since I think it is, at the end of the day (and with full apologies in advance to all Icelanders) 'pretty small lava'. And since my global imbalances theoretical model doesn't follow the well-trodden Roubini-Setser path (and since euro weakness means the dollar can't possibly fall), and since I don't think you need to treat every fresh crisis as just one more example of your own pet thesis, and since anyway I have enough on my plate right now, I thought, well, let's give this party a miss. There will be plenty more later.
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