Money Matters


To what extent does the media affect the economy? I believe it has a substantial effect, especially here in Iceland.

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Fair enough, the economy is growing very quickly, and the Króna is overvalued, but a core reason for the fragility of the Icelandic economy has to be when “experts” are continually undermining it with doom and gloom.

The news recently has been mixed, Icelandic banks hold too much power and may have been acting irresponsibly, but they are still very competitive and massively profitable. The Króna is strong against the dollar, but that is mainly down to massive foreign investment into the country, notably the Kárahnúkar dam project. Unemployment may be slowly increasing, but house prices are still increasing – and while expensive houses are bad news for buyers, they are a sign of a healthy economy.

At times like these, the media tend to devote a lot of coverage to the ´crisis’, because people are interested. Nothing makes better news than scary things that may or may not happen in the near future. In the meantime, if a single foreign investor is put off buying shares on the ICEX (stock exchange), and if a single Icelander decides not to move house or buy a new car, the media is directly responsible for the damage those two people have inflicted upon the economy.

I’m not asking for blind optimism, or treasury propaganda, but maybe, just maybe, media people the world over should be a little more careful about scaremongering to generate ratings. It seems journalists and civil servants are some of the only jobs that remain safe even during recessions…

AE [email protected]

Views expressed here are the author's own and do not necessarily reflect the opinions of Iceland Review.