ec4333 lecture 11
DESCRIPTION
Lecture 11TRANSCRIPT
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Lecture 11
Ireland in the EUYesterday, Today, Tomorrow
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Stats
Story so far
Ireland & EU
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Irish Economic Statistics
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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.
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Irish Real GDP Growth 1990-2005
http://www.esri.ie/irish_economy/
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http://www.esri.ie/irish_economy/
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http://www.esri.ie/irish_economy/
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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
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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
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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
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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
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- 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
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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
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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
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Handout
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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
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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
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Actual growth rateInflation gap
Unemployment gap
Growth rate of potential GDP
% change GDP
Time
Idea of Fiscal Policy
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Stats
Story so far
Ireland & EU
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Pre-1973
General Election 1977
Components of the Turnaround & Results
Fiscal Policy
Enter the EU
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Stabilisation of debt/GNP ratio
Real wage moderation
Cuts in expenditure
Widening the tax base
Tax amnesty
Components of the Turnaround
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Debt/GNP ratio fell to 106% by 1991
Rate of growth of GNP increased
Unemployment fell (14.7%)
Inflation (3.3%)
Results
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Fiscal Correction
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• 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....
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• 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
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Stats
Story so far
Ireland & EU
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Enter the EU
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External Funding
Euro/EMU/Maastricht criteria
Demographic Trends
Education Profile and Cost of Labour Force
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The Footprints of the Celtic Tiger
Growth Rates and Convergence
Inflation
Employment
Unemployment
Female Participation
Migration
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Thanks
Ireland in the EUYesterday, Today, Tomorrow
Next Week: Final Lecture!