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Policy Lessons from Ireland’s Latest Depression

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  • Karl Whelan

    (University College Dublin)

Abstract

This paper provides a selective review of Ireland’s economic performance of the last 20 years, from the early days of the Celtic Tiger, through to the housing boom and the recent slump, and then attempts to draw a few lessons from the period. The paper argues, based on a range of observations, that a substantial slowdown was looming for Ireland by 2007, independent of what was going to happen in the global economy, and much of this evidence was ignored in the implementation of economic policy. The result was a range of policies based on an unwarranted over-optimism which left Ireland terribly exposed to the international downturn. Policy failures in the fiscal and banking sectors are discussed, as well as some common criticisms of policy that have less justification.

Suggested Citation

  • Karl Whelan, 2010. "Policy Lessons from Ireland’s Latest Depression," The Economic and Social Review, Economic and Social Studies, vol. 41(2), pages 225-254.
    • Handle: RePEc:eso:journl:v:41:y:2010:i:2:p:225-254
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    References listed on IDEAS

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    1. Kieran McQuinn & Karl Whelan, 2008. "Prospects for Growth in the Euro Area," CESifo Economic Studies, CESifo Group, vol. 54(4), pages 642-680, December.
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    6. Kelly, Eilish & McGuinness, Seamus & O'Connell, Philip, 2009. "Benchmarking, Social Partnership and Higher Remuneration: Wage Settling Institutions and the Public-Private Sector Wage Gap in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 40(3), pages 339-370.
    7. Honohan, Patrick, 2009. "Resolving Ireland’s Banking Crisis," The Economic and Social Review, Economic and Social Studies, vol. 40(2), pages 207-231.
    8. Cussen, Mary & Kelly, John & Phelan, Gillian, 2008. "The Impact of Asset Price Trends on Irish Households," Quarterly Bulletin Articles, Central Bank of Ireland, pages 70-84, July.
    9. McQuinn, Kieran & O'Reilly, Gerard, 2006. "Assessing the Role of Income and Interest Rates in Determining House Prices," Research Technical Papers 15/RT/06, Central Bank of Ireland.
    10. R. A. Somerville, 2007. "Housing Tenure in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 38(1), pages 107-134.
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    Cited by:

    1. John FitzGerald, 2019. "Contributing to Macro-Economic Policy in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 50(4), pages 613-623.
    2. Colm McCarthy, 2009. "Fiscal adjustment and macroeconomic re-balancing in Ireland," Working Papers 200928, School of Economics, University College Dublin.
    3. Mac an Bhaird, Ciarán, 2013. "Demand for debt and equity before and after the financial crisis," Research in International Business and Finance, Elsevier, vol. 28(C), pages 105-117.
    4. Mladen Čudanov & Ondrej Jaško & Gheorghe Săvoiu, 2012. "Public and Public Utility Enterprises Restructuring: Statistical and Quantitative Aid for Ensuring Human Resource Sustainability," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 14(32), pages 307-322, June.
    5. Jesús Fernández-Villaverde & Luis Garicano & Tano Santos, 2013. "Political Credit Cycles: The Case of the Eurozone," Journal of Economic Perspectives, American Economic Association, vol. 27(3), pages 145-166, Summer.
    6. Donnellan, T. & Hanrahan, K. & Breen, James P. & Gillespie, P., 2013. "Climate Change and Agricultural Policy Coherence: Agricultural Growth and GHG Emissions in Ireland," 87th Annual Conference, April 8-10, 2013, Warwick University, Coventry, UK 158853, Agricultural Economics Society.
    7. Alan Barrett & Séamus McGuiness, 2012. "The Irish Labour Market and the Great Recession," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 10(02), pages 27-33, August.
    8. Constantin Gurdgiev & Brian M. Lucey & Ciarán Mac an Bhaird & Lorcan Roche-Kelly, 2011. "The Irish Economy: Three Strikes and You’re Out?," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 58(1), pages 19-41, March.
    9. Colm McCarthy, 2009. "Fiscal adjustment and re-balancing the Irish economy," Open Access publications 10197/1673, School of Economics, University College Dublin.
    10. Seán Ó Riain, 2012. "The Crisis of Financialisation in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 43(4), pages 497-533.
    11. Elish Kelly & Adele Bergin, 2018. "The labor market in Ireland, 2000–2016," IZA World of Labor, Institute of Labor Economics (IZA), pages 410-410, January.
    12. Peter Howley & Emma Dillon, 2012. "Factors affecting the level of farm indebtedness: the role of farming attitudes," Working Papers 1201, Rural Economy and Development Programme,Teagasc.
    13. Cathal O’Donoghue & Jason Loughrey & Denisa M. Sologon, 2018. "Decomposing the Drivers of Changes in Inequality During the Great Recession in Ireland using the Fields Approach," The Economic and Social Review, Economic and Social Studies, vol. 49(2), pages 173-200.
    14. Nyamdash, Batsaikhan & Denny, Eleanor, 2011. "The economic impact of electricity conservation policies: A case study of Ireland," MPRA Paper 28384, University Library of Munich, Germany.
    15. Colm McCarthy, 2009. "Ireland’s second fiscal consolidation – lessons from the last time," Working Papers 200917, School of Economics, University College Dublin.
    16. Karl Whelan, 2011. "Ireland’s Sovereign Debt Crisis," Working Papers 201109, School of Economics, University College Dublin.
    17. Adele Bergin & Elish Kelly & Paul Redmond, 2020. "The labor market in Ireland, 2000–2018," IZA World of Labor, Institute of Labor Economics (IZA), pages 410-410, January.
    18. Lunn, Pete, 2011. "The Role of Decision-Making Biases in Ireland's Banking Crisis," Papers WP389, Economic and Social Research Institute (ESRI).
    19. Christopher T. Whelan & Bertrand Maítre, 2013. "The Great Recession and the Changing Distribution of Economic Vulnerability by Social Class: The Irish Case," Working Papers 201312, Geary Institute, University College Dublin.
    20. Mary Cussen, 2015. "Deciphering Ireland’s Macroeconomic Imbalance Indicators: Statistical Considerations," The Economic and Social Review, Economic and Social Studies, vol. 46(2), pages 293-313.
    21. repec:ces:ifodic:v:10:y:2012:i:2:p:18948043 is not listed on IDEAS

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