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The Irish Tiger and the German Frog: A Tale of Size and Growth in the Euro Area

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  • Eloi Laurent

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

  • Jacques Le Cacheux

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

Abstract

In this paper, we try to relate country size to economic performance in the Euro area, focusing on the second smallest Euro area country, Ireland, and the region's largest economy, Germany, from 1995 to 2005. In the institutional context of the EMU, we show that Ireland smallness was a major factor in its spectacular success, while the growth strategy of Germany was not in line with its size and thus produced poor overall results. We argue that while Ireland needs to rethink its growth strategy with the arrival of the Eastern small states in the EU and the Euro area, Germany's economic extraversion - choosing external competitiveness over domestic expansion and resorting to social and tax competition - could be re-oriented towards intensive domestic growth with benefits, not only for the country, but also for the Euro area as a whole.

Suggested Citation

  • Eloi Laurent & Jacques Le Cacheux, 2007. "The Irish Tiger and the German Frog: A Tale of Size and Growth in the Euro Area," Working Papers hal-00972692, HAL.
    • Handle: RePEc:hal:wpaper:hal-00972692
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-00972692
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    Cited by:

    1. Jean-Paul Fitoussi & Eloi Laurent, 2009. "Macroeconomic and social policies in the EU 15: the last two decades," SciencePo Working papers Main hal-01066208, HAL.
    2. repec:hal:wpspec:info:hdl:2441/9717 is not listed on IDEAS
    3. repec:spo:wpecon:info:hdl:2441/10049 is not listed on IDEAS
    4. repec:spo:wpmain:info:hdl:2441/6146 is not listed on IDEAS
    5. Mauro Napoletano & Jean-Luc Gaffard, 2009. "Country Size, Appropriate Policy, and Economic Performance: Some Evidence from OECD Countries," SciencePo Working papers Main hal-00973080, HAL.
    6. repec:hal:wpspec:info:hdl:2441/6146 is not listed on IDEAS
    7. repec:hal:spmain:info:hdl:2441/6146 is not listed on IDEAS
    8. Jean-Paul Fitoussi & Eloi Laurent, 2008. "North by Northwest : What's Wrong with the French Model and How Can the Nordic Model Help ?," SciencePo Working papers Main hal-00973052, HAL.
    9. Éloi Laurent & Jacques Le Cacheux, 2010. "Taille des pays et stratégies de croissance," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(1), pages 171-190.
    10. repec:hal:spmain:info:hdl:2441/10049 is not listed on IDEAS
    11. Jean-Paul Fitoussi & Eloi Laurent, 2008. "North by Northwest: What's Wrong with the French Model and How Can the Nordic Model Help. The Nordic Model: Solutions for Continental Europe's Problems?", Center for European Studies, Harvard Uni," Post-Print hal-01053234, HAL.
    12. repec:hal:spmain:info:hdl:2441/9769 is not listed on IDEAS
    13. repec:spo:wpmain:info:hdl:2441/9769 is not listed on IDEAS
    14. repec:spo:wpmain:info:hdl:2441/eu4vqp9ompqllr09h95chf5k8 is not listed on IDEAS
    15. repec:hal:wpspec:info:hdl:2441/10049 is not listed on IDEAS
    16. repec:spo:wpecon:info:hdl:2441/6146 is not listed on IDEAS
    17. repec:spo:wpmain:info:hdl:2441/10049 is not listed on IDEAS
    18. repec:hal:spmain:info:hdl:2441/9717 is not listed on IDEAS
    19. Eloi Laurent, 2008. "Economic consequences of the size of nations, 50 years on," SciencePo Working papers Main hal-00972823, HAL.
    20. Luigi Bonatti & Andrea Fracasso, 2012. "A Germans� dilemma: save the euro or preserve their socio-economic model," Department of Economics Working Papers 1207, Department of Economics, University of Trento, Italia.
    21. repec:spo:wpecon:info:hdl:2441/9717 is not listed on IDEAS
    22. repec:hal:spmain:info:hdl:2441/eu4vqp9ompqllr09h95chf5k8 is not listed on IDEAS
    23. repec:spo:wpmain:info:hdl:2441/9717 is not listed on IDEAS

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