ABSTRACT
With a population of only 326,000 in 2011, Iceland is the smallest country in the world to have its own currency and a fl oating exchange rate. It is has been a member of the European Economic Area (EEA) since 1994, which makes it part of the European single market, though it is not a member of the European Union. Its standard of living is very high. According to the IMF, in 2011 Iceland’s GDP per capita was more than US$38,060, the fi fteenth highest in the world. Other indicators of economic wellbeing are also very favorable. Life expectancy is among the highest in the world (it ranks fi rst for females, and second after Japan for males). By almost any measure (e.g. democracy, rule of law, low corruption), the country has high-quality institutions. Its population has achieved high levels of educational attainment.1
