The Currency Game
According to the Icelandic Review, the prime minister thinks adopting the American or Canadian Dollar could be good for Iceland.
Iceland is a small place and I've wondered how they have been able to maneuver in international economics with a small economy and one dependent on trade. Actually I'm not sure they have been that successful and economists like Milton Friedman thought a long time ago that the country would have been better off using the dollar. The global recession hit Iceland hard and the country is only now recovering slowly.
Lots of countries just use the dollar and others peg their currencies to the dollar. The country can take advantage of low interest rates and the whole system is just simpler not having to worry about what others think the countries currency is worth.
Political leaders in Iceland would be prevented from playing games with the country's currency.
At the end of the day controlling inflation and government debt is vital to Iceland, it's just as important in the United States but we need to remember our responsibility to have policies that will encourage growth in employment and a strong dollar as well.
Iceland is a small place and I've wondered how they have been able to maneuver in international economics with a small economy and one dependent on trade. Actually I'm not sure they have been that successful and economists like Milton Friedman thought a long time ago that the country would have been better off using the dollar. The global recession hit Iceland hard and the country is only now recovering slowly.
Lots of countries just use the dollar and others peg their currencies to the dollar. The country can take advantage of low interest rates and the whole system is just simpler not having to worry about what others think the countries currency is worth.
Political leaders in Iceland would be prevented from playing games with the country's currency.
At the end of the day controlling inflation and government debt is vital to Iceland, it's just as important in the United States but we need to remember our responsibility to have policies that will encourage growth in employment and a strong dollar as well.
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