Iceland: Evolution of a small resource-based economy

Iceland is a small, isolated, resource-dependent country — just like Australia. It has a quite remarkable economic history, and in the last century, has fought its way from a position of relative poverty to being one of the richest countries in the world. For the most part it has pursued a Nordic approach to economic development, and has thereby circumvented some of the small government stances of market-based economies. In the context of its famed financial bubble, and its experience of boom, bust and revival in the last two decades, Iceland’s recent history might indeed be said to have generated a new Icelandic saga, as its brief dalliance with Austrian School economics first spawned an unprecedented boom, only then to see self-congratulation metamorphose into the jailing of some ‘bankster’ executives.