The question of what is the best monetary policy regime for Iceland has come up in the Icelandic election campaign and particularly it has been suggested that Iceland introduce a currency board.
It is well-known that I am not a major fan of pegged exchange rates but there is also a trade-off in choosing the “optimal” monetary policy regime between on the one hand having a strongly rule-based regime and having the “correct” anchor.
I discussed these issues at a seminar in Iceland hosted by Islandsbanki back in early 2015.
See my presentation “Towards a new Monetary Regime for Iceland” here (after 15 minutes)
The Market Monetarist 