capita in Western Europe at the start of the 20th century. According to one assessment by Central Bank of Iceland economists, Post-World War II economic growth has been both significantly higher and more volatile than in other OECD countries. The average annual growth rate of GDP from 1945 to 2007 was about 4%. Studies have shown that the Icelandic business cycle has been largely independent of the business cycle in other industrialised countries. This can be explained by the natural resource-based export sector and external supply shocks. However, the volatility of growth declined markedly towards the end of the century, which may be attributed to the rising share of the services sector, diversifi cation of exports, more solid economic policies, and increased participation in the global economy.According to Reuters, Iceland has had "over 20 financial crises since 1875". Agricultural modernization Certain institutional arrangements in Iceland retarded the modernization of agriculture and the growth of non-agrarian sectors. One such institution was "the system of land tenures with its heavy obligations to landlords and insecure farm leases, which discouraged fixed capital investment on the farms. The other was a wide-ranging social legislation set up to regulate family formations and to maintain a balance between agriculture and the fishing sector in favour of the former. The most effective regulatory device was a stringent labour bondage which had few parallels in Europe." In the early 20th century, there was a decline in rowing boat fishing as the fishing industry moved towards mechanized fishing vessels. Prior to 1880, agriculture (in particular, sheep products) was the largest share of Icelandic exports. Urbanization According to University of Iceland economists Davíd F. Björnsson and Gylfi Zoega, "The policies of the colonial masters in Copenhagen delayed urbanisation. The Danish king maintained a monopoly in trade with Iceland from 1602 until 1855, which made the price of fish artificially low – the price of fish was higher in Britain – and artificially raised the price of agricultural products. Instead, Denmark bought the fish caught from Iceland at below world market prices. Although the trade monopoly ended in 1787, Icelanders could not trade freely with other countries until 1855. Following trade liberalisation, there was a substantial increase in fish exports to Britain, which led to an increase in the number of sailing ships, introduced for the first time in 1780. The growth of the fishing industry then created demand for capital,