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Iceland: World Trade Organization

Without global trade, the extraordinarily isolated country of Iceland would likely not be able to survive as a developed country. In 2016, Iceland's trade to GDP ratio (the summed value of all imports and exports as a percentage of the total economy) was 91.6%. This was balanced nearly equally between imports at 42.5% and exports at 49.1%. ("Trade Policy Review: Iceland.") For a frame of reference, the trade to GDP ratio of the United States in the same year was 26.5%. ( “U.S. Trade to GDP Ratio 1970-2020.”)  This statistic shows, on a base level, that Iceland's is very connected to the global economy.  Thus, it is understandable that Iceland has positioned itself as an ardent supporter of the WTO and trade liberalization in general. Interestingly, Iceland's largest export sector is tourism, ("Trade Policy Review: Iceland.")  a service export which is less bound to the rules of international trade than it is to simple free movement. When the consumer com...
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Causes of Inequality and Poverty

    Absolute poverty in Iceland is very low. According to World Bank Data, the percentage of Iceland residents living below the international poverty line (the equivalent of $1.90 per day) from 2004 to 2011 was level at 0.1%. ("Poverty Gap at $1.90 a Day (2011 PPP) (%)") But there is still relative poverty in Iceland. According to RÚV, Iceland’s state-sponsored news outlet, about 9 percent of Icelanders live below the low-income threshold, defined as 170,000 ISK per month in disposable income. The Welfare Watch, an Icelandic government subsidiary, has assessed that to alleviate poverty, the government should pay base child benefits untied from income, and reduce housing costs for poor Icelanders. ("Over Six Thousand Icelanders Live in Severe Poverty") If we take this agency’s position at face value, austerity policies in government benefits are a cause of poverty in Iceland, i.e. the government isn’t spending enough on welfare to keep all of its citizens out of pove...
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Iceland Inequality and Poverty

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  *Data not available for 2016 We can see from the change in the Lorenz curve from 2006 to 2015 that income distribution in the country has gotten slightly more equal. This is reflected in its World Bank estimated Gini Coefficient, moving from 0.302 to 0.268 in the same timespan.
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Iceland Overall Economic Activity

https://docs.google.com/spreadsheets/d/1nZ4jNzD9bZzCHMf3Wd1bGaChQjduVDjnm2L37GAtkCE/edit?usp=sharing I believe that Iceland is in a neutral position in its business cycle, and is going into an upswing. In the past ten years, unemployment has declined significantly, indicating economic progress. In this same window, the government has gone from a negative to a positive account balance, and inflation has declined as well. The fact that inflation has yet to increase significantly indicates that Iceland is not yet at or near the peak of its business cycle. But in 2018, the last year of the data, there is a small uptick, which may hint at an increase in inflation in years to come. It is likely that the decrease in inflation since 2009 is a result of less deficit spending by the government, since there is no longer such high unemployment that it needs to combat.
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Iceland Aggregate Demand

https://docs.google.com/spreadsheets/d/16kWED0w2qNo_nVyr5nAVYVjzb-2qeSZ4QCeAvWx_iY4/edit?usp=sharing Looking at the metrics available on Trading Economics, particularly consumer spending, aggregate demand in Iceland is steadily growing. Looking at this in comparison to GDP, it is unsurprising that aggregate demand and GDP go up together. I imagine that business and economic activity would expand to accommodate an increase in willing buyers.
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