Lecture 11

1. Lecture 11
Ireland in the EU
Yesterday, Today, Tomorrow

2. Stats
Story so far
Ireland & EU

3. Irish Economic
Statistics

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. Irish Real GDP Growth 1990-2005
http://www.esri.ie/irish_economy/

6. http://www.esri.ie/irish_economy/

7. http://www.esri.ie/irish_economy/

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. 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. 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. 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. 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. 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. % 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. Handout

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. 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. Idea of Fiscal Policy
% change
GDP
Growth rate of potential GDP
Actual growth rate
Inflation gap
Unemployment gap
Time

19. Stats
Story so far
Ireland & EU

21. Pre-1973
General Election 1977
Components of the Turnaround &
Results
Fiscal Policy
Enter the EU

22. Components of the Turnaround
Stabilisation of debt/GNP ratio
Real wage moderation
Cuts in expenditure
Widening the tax base
Tax amnesty

23. Results
Debt/GNP ratio fell to 106% by 1991
Rate of growth of GNP increased
Unemployment fell (14.7%)
Inflation (3.3%)

24. Fiscal
Correction

25. 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

26. • 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

27. Stats
Story so far
Ireland & EU

28. Enter the EU

29. External Funding
Euro/EMU/Maastricht
criteria
Demographic Trends
Education Profile and Cost
of Labour Force

30. The Footprints of the Celtic Tiger
Growth Rates and Convergence
Inflation
Employment
Unemployment
Female Participation
Migration

31. Ireland in the EU
Yesterday, Today, Tomorrow
Thanks
Next Week: Final
Lecture!