Krugman's Icelandic Myths Has Melted

The Center for Geoeconomic studies has provided a good refutation (thank you Edward for the tip) of Paul Krugman's post where he argues that Iceland has fared well during the recent slump because it has been able to debase its currency.

See also my post on Iceland, which based on income-based indicators provide an even grimmer picture than the one suggested by demand-based indicators (These two should yield the same result since they are supposed to describe the same real world phenomenon, but since they are based on different data sources they usually differ somewhat. The truth usually lies somewhere in between).