Raza, Hamid; Gudmundsson, Bjorn Runar; Zoega, Gylfi; … - In: European Journal of Economics and Economic Policies: … 16 (2019) 1, pp. 94-133
This paper attempts to explain the role of capital inflows in creating economic booms and busts in a small open economy with sovereign currency. We develop a stock–flow consistent (SFC) model for a small open economy while relying on the experience of the Icelandic crisis. We demonstrate the...