EC4333 Lecture 11

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Lecture 11

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EC4333 Lecture 11

  1. 1. Lecture 11 Ireland in the EU Yesterday, Today, Tomorrow
  2. 2. Stats Story so far Ireland & EU
  3. 3. Irish Economic Statistics
  4. 4. Real GDP Per Capita 30000 25000 20000 15000 10000 5000 Year 1960 1970 1980 1990 2000 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.
  5. 5. Irish Real GDP Growth 1990-2005 http://www.esri.ie/irish_economy/
  6. 6. http://www.esri.ie/irish_economy/
  7. 7. http://www.esri.ie/irish_economy/
  8. 8. Ireland: Employment rates, 1996-2005 % of 15-64 age group 80 70 60 50 40 30 20 10 Males Females 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
  9. 9. Ireland & EU Unemployment Rates, 1996-2003 % of labour force 14 12 10 8 6 4 2 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 EU 25 Ireland
  10. 10. General Government Debt, EU and Ireland % of GDP 100 90 80 70 60 50 40 30 20 EU 25 Eurozone 12 10 Ireland (% of GDP) Ireland (% of GNI) 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 http://www.cso.ie/releasespublications/measuringirelandsprogress2005.htm
  11. 11. 1 Euro’s worth in bilateral exchange rates, 1999-2005 value of €1 1.60 1.40 1.20 1.00 0.80 0.60 0.40 US dollar Pound sterling 100 Japanese yen 0.20 0.00 1999 2000 2001 2002 2003 2004 2005
  12. 12. EU and Ireland Public Balance, 1996-2004 Eurozone 12 % of GDP Ireland 6 3% of GDP deficit limit under EMU Stability and Growth Pact 4 2 0 -2 -4 -6 1996 1997 1998 1999 2000 2001 2002 2003 2004
  13. 13. Ireland: Central and Local Govt Expenditure as a % of GDP 40.0 30.0 % GDP 20.0 % of GDP 10.0 0.0 95 96 97 98 99 00 01 02 03 5 04 19 19 19 19 19 20 20 20 20 20 Year
  14. 14. % GDP Lu xem bo 20.0 40.0 60.0 80.0 0.0 100.0 120.0 140.0 Ir urg el Cz Sl an ec o d h va Re k i N et pu a he bl rla ic nd Au s st Cy ria D pr en us G ma er rk m an Po y la nd It al Sp y G ain re N ece EU Exports of Goods and Services, 2003 or w Ic ay el an d
  15. 15. Handout
  16. 16. Ireland: Science and technology graduates, per 1,000 population aged 20-29, 1995-2004 per 1,000 population aged 20-29 Males Females 35.0 30.0 25.0 20.0 15.0 10.0 5.0 0.0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
  17. 17. Ireland & EU spending on Social Protection, 1996-2003 % 30 25 20 15 10 EU 15 (% of GDP) EU 25 (% of GDP) 5 Ireland (% of GDP) Ireland (% of GNI) 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
  18. 18. Idea of Fiscal Policy % change GDP Growth rate of potential GDP Actual growth rate Inflation gap Unemployment gap Time
  19. 19. Stats Story so far Ireland & EU
  20. 20. Pre-1973 General Election 1977 Components of the Turnaround & Results Fiscal Policy Enter the EU
  21. 21. Components of the Turnaround Stabilisation of debt/GNP ratio Real wage moderation Cuts in expenditure Widening the tax base Tax amnesty
  22. 22. Results Debt/GNP ratio fell to 106% by 1991 Rate of growth of GNP increased Unemployment fell (14.7%) Inflation (3.3%)
  23. 23. Fiscal Correction
  24. 24. Caution.... • 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
  25. 25. • 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
  26. 26. Stats Story so far Ireland & EU
  27. 27. Enter the EU
  28. 28. External Funding Euro/EMU/Maastricht criteria Demographic Trends Education Profile and Cost of Labour Force
  29. 29. The Footprints of the Celtic Tiger Growth Rates and Convergence Inflation Employment Unemployment Female Participation Migration
  30. 30. Ireland in the EU Yesterday, Today, Tomorrow Thanks Next Week: Final Lecture!

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