Iceland: Selected Issues

August 7, 2013

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Format: Chicago

Iceland: Selected Issues, (USA: International Monetary Fund, 2013) accessed December 21, 2024

Summary

This Selected Issues paper analyses the impact of a potential rebalancing of Icelandic residents’ investment portfolios as capital controls are lifted. It applies optimal portfolio theory to calculate the potential rebalancing toward foreign assets, and then makes an estimate of the cumulative impact on the balance of payments and international reserves. Conclusions for the authorities’ capital account liberalization strategy are drawn. This paper also measures the potential budgetary savings from improving the efficiency of public spending in health and education in Iceland. A Data Envelopment Analysis is used to estimate an efficiency frontier by comparing across Organization for Economic Cooperation and Development countries the transformation rates of public spending into valuable social outcomes.

Subject: Balance of payments, Education, Education spending, Expenditure, Foreign direct investment, Health, Health care spending, Pension spending

Keywords: Asset holding, Asset position, Balance of payments, CR, Foreign direct investment, Health care saving, Health care spending, Investment assets, ISCR, OECD mean, Optimal portfolio, Pension spending, Portfolio, Saving

Publication Details

Pages:

24
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2013/257
Stock No:

1ISLEA2013002
ISBN:

9781484329979
ISSN:

1934-7685

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