Recalculation in Iceland
February 02, 2011 at 14:30 PM EST
As you know, I’ve been critical of “recalculation” models of the US recession. I think it’s mostly demand-side, and some unknown part of the supply-side is government labor market interference. Only a modest portion is recalculation. But Arnold Kling’s model almost perfectly explains the current Icelandic recession: Economy Minister Arnason wants more for Iceland than [...]