SFC haglíkan - verkefni lokið

Fréttatilkynning verkefnisstjóra


A research project to develop a stock-flow-consistent (SFC) model of the Icelandic economy has now been completed. With this model it´s possible to capture the destabilising role of international credit in small economies like Iceland and provide understanding for the sudden stop of capital flows that followed. 

By replicating the Icelandic crisis where banks´ balance sheets reached extreme levels in terms of assets and debt levels, both domestic and external assets and debt rose accordingly, the economic effects of financial expansion can be analysed. The project also included a comparison between the financial crisis in Iceland and Ireland. One application of a model of this kind is to examine the effects from the interest rate differential between domestic and foreign denominated loans. What is the impact on domestic monetary policy, and how is the exchange rate likely to respond. The results of the study are presented in the following papers:

1. Two Thorns of Experience: Financialisation in Iceland and Ireland, Hamid Raza, Bjorn Gudmundsson, Gylfi Zoëga and Stephen Kinsella, International Review of Applied Economics, 30 (6), 771-789.

2. Financialisation and financial crisis in Iceland, Björn Rúnar Guðmundsson, European Journal of Economics and Economis Policies: Interention, October 2016.

3. Financial development, crisis and recovery in small open economies: A Stock-Flow Consistent (SFC) approach. Hamid Raza, Bjorn Gudmundsson, Working Paper, to be published, available on request.

Heiti verkefnis: SFC haglíkan
Verkefnisstjóri: Gylfi Zoega, Háskóla Íslands

Tegund styrks: Verkefnisstyrkur
Styrktímabil: 2013-2015
Fjárhæð styrks: 19,97, millj. kr. alls
Tilvísunarnúmer Rannís:  130551

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