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An Analysis Of Iceland Economics Essay

   

Added on  2020-05-04

5 Pages1069 Words52 Views
Running head: ECONOMIC CASE STUDY Economic Case StudyName of the StudentName of the UniversityAuthor Note
An Analysis Of Iceland Economics Essay_1
1ECONOMIC CASE STUDY Introduction The essay tries to discuss the performance of the economy of Iceland and the dynamics in thesovereign credits and overall balance of payments of the same, pre and post the Global EconomicCrisis of 2008. In the context of the same it tries to take into account the sovereign credit ratingof the country (Taking Moody’s ratings in this case) and analyze the relevance of the dynamicsin the credit rating, the positive and negative sides of the economy. It also tries to discuss theproblems and prospects of the country joining the European Union (Afonso, Furceri and Gomes2012). Iceland Economy: Financial Sector The economy of Iceland had proved to be one of the consistently stable economy in the worldbefore the advent of the Global Financial Crisis of 2008 and the country was experiencingimmense financial credibility and profitability in the financial sector. The country, thus, alsoenjoyed high sovereign credit rating which facilitated both domestic as well as internationalinvestment (Hart-Landsberg 2013). Broadly leveraged financial sector If the financial sector of any country is highly leveraged then that implies that there remains aheavy tendency of financing expenditures by borrowing, by the households as well as theinvestors, which in its turn keeps on increasing both the internal as well as the external debtburden of the country. Iceland, before the occurrence of the financial crisis shows the same trendas the households and the banking and the private financial companies of the country showed atendency of borrowing extensively from the international market (Gunnarsson, Bjarnadóttir andRíkardsson). As can be seen from the data evidences, the external debt of the economy was
An Analysis Of Iceland Economics Essay_2

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