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Catching up with the leaders : the Irish hare

Author

Listed:
  • Patrick Honohan
  • Brendan M. Walsh
Abstract
For many decades Ireland's output per capita ranked about twenty-fourth among the world's industrial nations. Suddenly, in the mid-1990's Ireland started to move up, from twenty-second in 1993 to eighteenth in 1997 and an amazing ninth in 1999. The many facets of Irish success over these years, from a disproportionate representation in popular music to the largest current account surplus in the industrial world, caught the public imagination at home and abroad. This article examines the startling turnaround in Irish economic performance that began in the mid 1980's. Ireland is not alone in having experienced severe macroeconomic imbalances in the past quarter century, but their amplitude has been greater than in almost any other OECD country. The early 1980's saw the worst extremes. In 1981 inflation was 21 percent, the current account deficit was about 15 percent of GNP. and public sector borrowing was running at an even higher rate. The attempt to rein in the twin deficits caused taxation to jump by 10 percentage points of GNP in seven years, while overt unemployment soared to 16 percent of the labor force in 1986 and net emigration approached 1 percent of the population.

Suggested Citation

  • Patrick Honohan & Brendan M. Walsh, 2002. "Catching up with the leaders : the Irish hare," Open Access publications 10197/1596, School of Economics, University College Dublin.
    • Handle: RePEc:ucn:oapubs:10197/1596
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    File URL: http://hdl.handle.net/10197/1596
    File Function: Open Access version, 2002
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    References listed on IDEAS

    as
    1. John Curtis & John FitzGerald, 1994. "Convergence in an Open Labour Market," Papers WP045, Economic and Social Research Institute (ESRI).
    2. Honohan, Patrick & Conroy, Charles, 1994. "Irish Interest Rate Fluctuations in The European Monetary System," Research Series, Economic and Social Research Institute (ESRI), number GRS165.
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    8. Denny, Kevin & Harmon, Colm & Redmond, Sandra, 1999. "Wages and Human Capital: Evidence from the Irish Data," Papers 99/3, College Dublin, Department of Political Economy-.
    9. Kevin Denny & Colm Harmon, 1999. "Wages and human capital," Open Access publications 10197/145, School of Economics, University College Dublin.
    10. Frank Barry & John Bradley & Aoife Hannan, 2001. "The Single Market, the Structural Funds and Ireland's Recent Economic Growth," Journal of Common Market Studies, Wiley Blackwell, vol. 39(3), pages 537-552, September.
    11. Walsh, Brendan, 1993. "Credibility, Interest Rates and the ERM: The Irish Experience," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 55(4), pages 439-452, November.
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