Iceland is often presented as having cured its problems from the financial crisis while Ireland’s deflation is presented as an unqualified disaster without any upside.
The true picture is more complicated, of course. David Howden explains in Monday’s Mises Daily:
Digging deeper, however, we find that not all is as it seems. Many Icelanders work two jobs to make ends meet. This effect was increasingly pronounced through the recession as inflation made it more difficult to get by with one salary. As a consequence, many Icelanders lost one job during the recession but the unemployment statistics did not reflect this as they were still employed elsewhere. This is notably not the case in Ireland, where not only is one job per worker the norm, but falling prices made it easier for an employed person to make ends meet as the recession continued.