According to Andersen and Gudmundsson (1998) Iceland has been subject to several external shocks, most related to fishing, either catches or prices. It is remarkable, however, that most shocks have been positive. From this perspective an appreciation of the Icelandic krone could have been an obvious way to distribute the increasing real income across the nation.
However, this took place via inflation in wages, leading to rising real-wages as well, because of the high share of imported goods in private consumption. When profitabilty in fishing got squeezed demands for a depreciation of the currency were normally met after some time, cf. Chart 2.