Peaks, Troughs and Crisis by Krugman

One place where I do disagree with Ryan is in his desire to stop talking about Iceland. Yes, it’s a small island exporting mainly fish and aluminum. But you take your natural experiments where you find them. (Milton Friedman made his original case for floating exchange rates in part by invoking the example of, believe it or not, Tangier). Iceland was the only European-periphery country that received huge capital inflows, then responded to crisis not with a grim determination to stay on or pegged to the euro, but by devaluing. In the process it demonstrated that devaluation is a lot easier than “internal devaluation”, which is actually the main point.