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2007 OECD Economic Outlook, Volume 2007 Issue 2

image of OECD Economic Outlook, Volume 2007 Issue 2
Twice a year, the OECD Economic Outlook analyses the major trends and examines the economic policies required to foster high and sustainable growth in member countries. Developments in major non-OECD economies are also evaluated. This issue covers the outlook to end-2009. Together with a wide range of cross-country statistics, the Outlook provides a unique tool to keep abreast of world economic developments. In addition to the themes featured regularly, this issue contains a special chapter entitled Corporate saving and investment: Recent trends and prospects.

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Iceland

Expansionary government measures have rekindled demand and inflation pressures at a time when imbalances in the economy remain substantial. Still, tight monetary policy is expected to eventually succeed in slowing the economy, taming inflation and reducing imbalances. However, the slow and uneven adjustment process leaves the economy vulnerable to changes in foreign-investor sentiment, especially in a context of fragile global financial-market conditions, and has increased the risk of a harder landing of the economy.

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