Lecture 11
Ireland in the EUYesterday, Today, Tomorrow
Stats
Story so far
Ireland & EU
Irish Economic Statistics
1960 1970 1980 1990 2000Year
5000
10000
15000
20000
25000
30000
Real GDP Per Capita
Irish Real GDP per Capita, 1950-2005. Source: Penn World Tables v. 6.2, CSO.ie, and author's calculations. Penn Data available here, CSO data available here.
Irish Real GDP Growth 1990-2005
http://www.esri.ie/irish_economy/
http://www.esri.ie/irish_economy/
http://www.esri.ie/irish_economy/
0
10
20
30
40
50
60
70
80
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
% of 15-64 age group
Males Females
Ireland: Employment rates, 1996-2005
0
2
4
6
8
10
12
14
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
% of labour force
EU 25 Ireland
Ireland & EU Unemployment Rates, 1996-2003
0
10
20
30
40
50
60
70
80
90
100
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
% of GDP
EU 25 Eurozone 12Ireland (% of GDP) Ireland (% of GNI)
General Government Debt, EU and Ireland
http://www.cso.ie/releasespublications/measuringirelandsprogress2005.htm
0.000.200.400.600.801.001.201.401.60
1999 2000 2001 2002 2003 2004 2005
value of €1
US dollar Pound sterling 100 Japanese yen
1 Euro’s worth in bilateral exchange rates, 1999-2005
- 6
- 4
- 2
0
2
4
6
1996 1997 1998 1999 2000 2001 2002 2003 2004
% of GDPEurozone 12Ireland3% of GDP deficit limit under EMU Stability and Growth Pact
EU and Ireland Public Balance, 1996-2004
Ireland: Central and Local Govt Expenditure as a % of GDP
0.0
10.0
20.0
30.0
40.0
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
5
Year
% G
DP
% of GDP
0.020.040.060.080.0
100.0120.0140.0
Luxe
mbo
urg
Ireland
Slov
akia
Czec
h Re
public
Nethe
rland
sAu
stria
Cypr
usDen
mar
kGer
man
yPo
land
Italy
Spain
Greec
eNor
wayIcelan
d
% G
DP
EU Exports of Goods and Services, 2003
Handout
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
per 1,000 population aged 20-29Males Females
Ireland: Science and technology graduates, per 1,000 population aged 20-29, 1995-2004
0
5
10
15
20
25
30
2003200220012000199919981997199619951994
%
EU 15 (% of GDP)EU 25 (% of GDP)Ireland (% of GDP)Ireland (% of GNI)
Ireland & EU spending on Social Protection, 1996-2003
Actual growth rateInflation gap
Unemployment gap
Growth rate of potential GDP
% change GDP
Time
Idea of Fiscal Policy
Stats
Story so far
Ireland & EU
Pre-1973
General Election 1977
Components of the Turnaround & Results
Fiscal Policy
Enter the EU
Stabilisation of debt/GNP ratio
Real wage moderation
Cuts in expenditure
Widening the tax base
Tax amnesty
Components of the Turnaround
Debt/GNP ratio fell to 106% by 1991
Rate of growth of GNP increased
Unemployment fell (14.7%)
Inflation (3.3%)
Results
Fiscal Correction
• SOE is extremely susceptible to external ‘shocks’
• FP tends to have more impact on the BoP then on employment or prices
• Multiplier effect is very weak in a SOE because of a high MPM
Caution....
• Increase in taxation rather than reducing current expenditure
• Loss of confidence in the economy which led to a higher level of interest and a higher EBR and national debt
• Global Economic downturn
Stats
Story so far
Ireland & EU
Enter the EU
External Funding
Euro/EMU/Maastricht criteria
Demographic Trends
Education Profile and Cost of Labour Force
The Footprints of the Celtic Tiger
Growth Rates and Convergence
Inflation
Employment
Unemployment
Female Participation
Migration
Thanks
Ireland in the EUYesterday, Today, Tomorrow
Next Week: Final Lecture!
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