Unsustainable accumulation of debt precedes financial crises. The recent Western financial crisis was no exception in this regard. The external debt of Greece, Iceland, Ireland, and Spain increased exponentially, in Iceland at a rate higher than the rate of interest on foreign debt. The Ponzi...

For a long time, abundant natural resources brought Iceland a high and volatile real exchange rate with adverse effects on manufacturing and services. During 2003-2008, another national treasure, the sovereign's AAA rating, was used by privatized banks to attract foreign capital, elevating the...

We use a change in Iceland’s education system as a natural experiment to measure the effect of years spent in upper secondary school on subsequent first year outcomes at university. The duration of Iceland´s upper-secondary education was shortened by one year through compression of the...