Individual weekly contribution to Seminar Topic 5 discussion and questions

Read the short case ''The IMF & Iceland’s economic recovery”.

It is located on pp. 338-339 in your textbook or you can access it from the e-Library resources provided for this course on the learnonline site.   

Answer the questions below. Do NOT answer the questions at the end of case in the textbook.

Attach a word document for each post with the following format:

FAMILYname-Firstname-week#.doc

"There are a range of 'internal' and 'external' underlying factors that have contributed to Iceland’s economic troubles in 2008. While some argue that it was facing a classic currency crisis, others take a different view, arguing that it faced a banking crisis". 

In light of this statement discuss the following questions:

1. How did Iceland recover from its 2008-2009 crisis? Has this been completed? What important lessons can be drawn from this case?

2. Interestingly, Iceland did not implement the austerity policies that are so often associated with IMF loans, and yet the economy appears to have recovered. Does this suggest that austerity policies do not work? Why? 

(300-600 words)