Assessment and Recommendations I. Recent Trends and Prospects -The Economy Remains Overheated -The Near-Term Outlook and Associated Risks -The Effect of a Possible Extra Aluminum Smelter on the Medium-Term Outlook II. Macroeconomic Policies -Monetary Management -The Fiscal Stance III. Increasing Simplicity, Neutrality, and Sustainability: A Basis for Tax Reform -Introduction -Towards a Simple Tax System -The Current Tax System in Iceland -Scope for Action IV. Structural Surveillance -New Activities -Traditional Activities -Framework Conditions -Assessment and Scope for Further Action Annex I. Main Features of the Tax System in 2001 Annex II. Calendar of Main Economic Events