Sebastian Edwards finds that monetary policy in Iceland has been run in an effective way since approximately 2012 and contributed in a significant way to the recovery of the Icelandic economy. He then addresses two new instruments of monetary policy: currency intervention and capital controls....

Monetary policy regimes encompass the constraints or limits imposed by custom, institutions and nature on the ability of the monetary authorities to influence the evolution of macroeconomic aggregates. This chapter surveys the historical experience of both international and domestic (national)...