Financialisation and financial crisis in Iceland

Björn Rúnar Guðmundsson
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Björn Rúnar Guðmundsson: University of Iceland and Statistics Iceland, Reykjavík, Iceland

European Journal of Economics and Economic Policies: Intervention, 2016, vol. 13, issue 3, 292-322

Abstract: Financialisation in Iceland should be seen as an evolving process driven by a mixture of global and domestic forces. Responding to fundamental issues underlying macroeconomic imbalances, the authorities introduced policies that proved particularly supportive of financial expansion at a time when cross-border capital movements were rapidly on the rise. Consequently, the rise in financial activity has had profound effects on income distribution and corporate and household behaviour. Following the 2008 financial meltdown, which was triggered by excessive growth of the financial sector, financialisation in Iceland has reversed to a degree, allowing for a shift away from financial-led towards increasingly export-led growth.

Keywords: economic development; financialisation; financial crisis (search for similar items in EconPapers)
JEL-codes: E02 E21 E22 E25 F36 G01 O11 (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:elg:ejeepi:v:13:y:2016:i:3:p292-322

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