Knowledge

City street with colorful buildings, wet roads, people with umbrellas, and misty mountains behind

Iceland’s Inflation Battle: Ending Indexation and Restoring Stability

This piece outlines a phased plan to abolish verðtrygging in Iceland, interlinked with combating inflation. It highlights how current indexed mortgages disconnect from central bank policies, leading to persistent inflation. The proposed approach involves first ceasing new indexed loans to restore monetary policy effectiveness, followed by gradual conversion once inflation is under control.

A Loan, Not a Gift: On the Prime Minister, the Euro, and the Promise of Lower Interest Rates

This analysis critiques Iceland’s Prime Minister’s arguments for EU membership regarding monetary sovereignty. It emphasizes that historical examples show joining the euro could lead to lower initial interest rates but also hidden risks, mispricing, and inflation issues. The author advocates for domestic reforms instead of abandoning currency sovereignty.