The Fiscal Council has a vacancy for an economist

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September 3rd, 2015

The Irish Fiscal Advisory Council has a vacancy for an economist, details are here. Closing date is the 16th of September.

Review of Leaving Certificate Economics

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September 2nd, 2015

Drs Aedin Doris, Kevin Denny and I wrote a response to the consultation paper on the review of leaving cert economics for the Irish Economic Association.

The consultation paper is here (.pdf). The response is here (.pdf). 

Save the Date: September 30 Conference on Higher Education Funding in Maynooth

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September 1st, 2015

On Wednesday, September 30, we are holding a one-day conference on ‘Higher Education Funding: Drawing on the International Experience’ in Maynooth.

The context for this conference is the debate on how to fund higher education in Ireland. In 2014, the Minister for Education established an Expert Group on Future Funding for Higher Education, and the motivation for the conference is to inform the discussion about the choice of funding options available; we have a particular interest in the interaction between funding mechanisms and differential access to higher education along socioeconomic lines.

International speakers include Sara Goldrick-Rab of the University of Wisconsin-Madison, who has written extensively on the issue of higher education funding in the US; Claire Crawford of Warwick University and the IFS, who has written several detailed analyses of the UK system; and Bruce Chapman of the Australian National University, whose name is particularly associated with income-contingent student loans, both in terms of his academic research and his role as policy advisor to many governments.

Local speakers include Rory O’Donnell of NESC and Delma Byrne of Maynooth University.

The conference will be open to all. I’ll post further details here in the coming weeks.

Controlling the Health budget: Annual budget implementation in the public health area

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August 28th, 2015

IFAC have a new analytical note on this topic: here.

Insider or Outsider? Bloomberg article on Honohan succession

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August 28th, 2015

There is a brief article in Bloomberg Business today about the search for a new Irish Central Bank governor.

“Ireland is about to deliver evidence on whether, nearly two years after regaining its economic sovereignty, much has really changed. ……   Noonan’s dilemma now is whether to move back to the pre-crisis mode of finding a governor from inside the civil service, or repeat the Honohan recipe and appoint another outsider.”

The Paddy Power betting odds are discussed. As a financial economist, I am forbidden by the Efficient Market Theory from making gambling bets, but perhaps some of the labour/macro economists might want to take a punt.

I had an earlier post on the strategic issues around this appointment. The recent China-related volatility in financial markets is the latest difficult policy problem confronting monetary authorities in Europe and globally. Ireland should appoint someone as governor who can serve both domestically and also contribute to ECB council deliberations.

Since some readers will know some of the people mentioned personally, I blocked the comments feature.

 

China: Growth and Debt (Geneva Report on Deleveraging)

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August 25th, 2015

The China section in the 2014 Geneva Report provides some guidance in relation to the current debate – here.

See also NYT article here.

Don’t blame German banks for the Irish economic crisis

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August 18th, 2015

Derek Scally writes here.

Brexit and Ireland

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August 9th, 2015

The election of the majority Conservative government in May meant that a referendum to decide whether Britain remains part of the EU became inevitable. A commitment to an “in-out” referendum on EU membership was provided in the May Queen’s Speech and it will likely go ahead in 2016 (or 2017 at the latest). Opinion polls show a split electorate. Risk aversion and other status quo factors should work in favour of the “stay” side. Bookies odds reflect this with at least one popular bookmaker placing the odds of a “leave” result at 3-1. In any case while the likeliest outcome at present is that Britain will remain in the EU, it is still a strong possibility they will leave and worth discussing in terms of implications for Britain and other countries. Germane to the title of this blog the implications for the Irish economy broadly are worth discussing.

In the draft national risk assessment published by the Taoiseach’s office earlier this year, Brexit is mentioned as follows:

“Following the general election in May, the British Government is likely to make proposals both on how the functioning of the EU could be improved and on how specific UK concerns about EU membership could be addressed, with the possibility of a UK referendum on EU membership. A fundamental change to the role of the UK in the EU, or a period of continuing uncertainty regarding the UK’s relationship with the EU, could present significant challenges for the EU as a whole and for Ireland in particular, especially in terms of (i) pursuit of Ireland’s objectives as a Member State as the UK is an important ally within the EU on negotiations on issues of mutual concern such as trade and the deepening of the single market; 24 (ii) bilateral relations with the UK, including the significant economic and trading relationship; and (iii) the impact on Northern Ireland issues and North/South relations.”

A number of questions come to mind in the prospect of Britain leaving the EU. I raise these purely for discussion and they are not ordered by any degree of likelihood or priority. In the event of a “leave” vote a number of alternative configurations might result including various forms of trade deal with the UK and EU members. (See here for one attempt to answer some of the economic questions below; Davy’s also released a piece on economic effects; NTMA piece on economic effects here; Alan Matthews on the implications for Irish agri-food).

a) What are the implications for border arrangements between Northern Ireland and the Republic of Ireland?

b) What are the implications for the status of UK citizens living in the Republic Ireland?

c) What are the implications for Irish citizens living in the United Kingdom?

d) Will the uncertainty surrounding the referendum affect currency volatility?

e) How will the uncertainty surrounding the referendum impact on FDI into Ireland? Does the prospect of a Brexit make Ireland a safer destination for some types of companies relative to the UK? In a “leave” scenario would Ireland be more attractive a destination than the UK for non-EU companies looking for access to the EU market?

f) How would a Brexit influence trade between Ireland and the rest of the EU?

g) What implications would Brexit have for the Scottish political situation and potential knock-on effects to the Irish economy?

h) What implications would it have for support for the EU in Ireland?

i) How would a “leave” result influence the Northern Irish economy?

j) Would a “leave” result limit mobility of Irish people to the UK?

k) What implications would a “leave” result have for wider political movements in Europe?

The small amount of publicly available analysis so far suggests the answer to most of the economic questions is that it would have a negative impact on the Irish economy largely coming through trade disruption. But it seems clear there is a lot of uncertainty in what a leave scenario would look like. As reported widely in the media there are now various groups in Ireland looking at these questions including in various state agencies and the Central Bank. It will be interesting to see this debate unfold.

A 14 year old who should be very proud of herself

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August 5th, 2015

I find this story both extraordinary and inspiring.

Ms Fried’s article is published here.

A roadmap for reform of the euro zone

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August 4th, 2015

I provide a brief discussion of the recent Five Presidents’ Report in this IT article – here.

J.A. Hobson on the Eurozone crisis (sort of)

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August 3rd, 2015

Philippe Legrain points out that, far from creating the sort of European-level democratic space that would allow citizens to choose between political and economic alternatives, closer European political union is likely to place more even restraints on the power of politicians to respond to voters’  demands for alternative policies. This is because ever more rules proscribing what others can do, and made up by Germany, is what Germany wants (not that she has historically felt bound by rules when fundamental national interests are at stake, as inter alia the collapse of the EMS and the scrapping of the excessive deficit procedure inform us; and quite right too in my view).

But why does Germany want this?

Harold James has one view here.

And here is J.A. Hobson:

Moreover, while the manufacturer and trader are well content to trade with foreign nations, the tendency for investors to work towards the political annexation of countries which contain their more speculative investments is very powerful.

 

LTV and DTI Limits—Going Granular; From Systemic Banking Crises to Fiscal Costs: Risk Factors

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August 2nd, 2015

More cross-country analysis by the IMF on the properties of LTV and DTI limits – here.

Also, new IMF work on the fiscal costs of systemic banking crises – here.

Macroprudential Regulation Conference: Change of Date

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July 29th, 2015

The conference on macroprudential regulation originally scheduled for September 4th has been postponed to Friday, January 29th, 2016. See here for all details on the conference. A full programme will be provided closer to the date.

Famine in Ireland 1300 to 1900

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July 27th, 2015

I posted earlier in the year on Cormac O’Grada’s recently published book on famines. He has also recently released, among several other works, a working paper on the history of Irish famines since 1300. A version is available here and provides a chronology and history of several Irish famines pre-dating the 1840s.

 

 

Guest post by Marios Zachariadis: On the Greek Crisis and German Imbalances

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July 24th, 2015

Policies undertaken from a narrow national perspective that encourage systematic fiscal surpluses coupled with a national consensus on wage suppression between unions and industry facilitated by the state, impact negatively upon domestic spending while increasing national saving and may lead to mercantilist outcomes of systematic policy-induced positive trade balances with large financial flows going the other way. This mechanism in relation to export-dependent countries like Germany has been recognized for a while by leading American economists like Obstfeld (the IMF’s new chief economist succeeding Blanchard) or Bernanke, while many have also pointed out low domestic investment, consumption taxes, and rigidities in the service sector as additional policy-related reasons for this German systematic phenomenon. Read the rest of this entry »

Economists and the European democratic deficit

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July 24th, 2015

I have a column in Critical Quarterly, available here.

Call for Proposals DEW Conference 2015

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July 21st, 2015

The Dublin Economics Workshop will hold its annual economic policy conference at the Hodson Bay Hotel in Athlone October 16th and 17th next. Proposals in any area of economic policy are invited and should be forwarded, ideally before September 4th, to both of the following: charles.larkin@gmail.com and colm.mccarthy@ucd.ie.

Programme and booking details will be circulated in due course. The Dublin Economics Workshop is kindly sponsored by Dublin Chamber of Commerce.

More on Greece

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July 21st, 2015

Colm McCarthy and I were up in front of the Oireachtas Finance Committee last week to talk about Greece.  I attach my speaking notes. (Colm’s were essentially as published in the Sunday Independent the other day). I think it’s fair to say that we both kicked to touch on Pat Rabbitte’s question as to what politically acceptable solution could have been pulled out of the hat. This is a question for the diplomats and politicians rather than economists.  The radicals and the establishment parties across Europe had manoeuvered each other so that they ended up painted not so much into a corner as up against an open 10th floor window.  Someone was going to be defenestrated.  And it was never going to be the strong.

Diary Date: Workshop on Well-Being and Recent Irish Economic History

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July 19th, 2015

Kevin Denny and I are organising a half-day workshop to look at Changes in Well-being in Ireland over the last 10 to 15 years. Obviously this has been an eventful time in Ireland and we think it would be very useful at this stage to draw together what is known about the Irish case.  Our specific aim is to consider a  wide range of possible outcomes including physical and mental health as well as subjective well-being. Moreover we want to draw on a range of approaches from epidemiology, psychological medicine and the social sciences as well as different types of data. Our intention is to have  around 7 presentations with plenty of time for discussion. The event will be held in the UCD Geary Institute on Tuesday November 17th from 12pm to 4pm. A light lunch would be provided. Further details of the talks and how to register will be provided here in due course. Suggestions on the programme still welcome.

Economics, Psychology and Policy Meetings

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July 15th, 2015

Since 2008 a number of us have organised an annual conference for people working at the interface of economics, psychology and related areas. Speakers have included international thought-leaders in this area including David Laibson, David Halpern, Robert Sugden, Arie Kapteyn, Ruth Byrne and John O’Doherty as well a diverse range of speakers from across economics, psychology and policy in Ireland and they have contributed to maintaining an active discussion of the potential for this area in Ireland. The next one will take place at the ESRI in Dublin on November 27th. At the previous session we agreed to organise some more adhoc meet-ups in between the events partly to disseminate new ideas and also with a view to establishing a more structured network in this area in Ireland. The first of these meetings takes place in Dublin on July 22nd organised by myself and Sean Gill. It will take place at 7pm sharp at the Roasted Brown coffee shop in Temple Bar. There will be 5 short presentations (to be listed here in the next couple of days) and some discussion about future events. Meet-ups around this area are now taking place in several cities including London and Sydney. I spoke at the Sydney event recently and it was extremely lively and led to several useful follow-ups. There are many people interested in this broad area in Dublin and Ireland more generally. This is intended to a broad forum and we welcome attendance and contribution from academics interested in exchanging ideas with a broad audience, people across different areas including students and people with business and policy interests in this area. For now we envisage the events being structured around short talks where a speaker describes briefly an idea they are working on or thinking about and potentially some suggestions for collaboration. Though there are many other event formats that could be considered. If you are attending please drop me an email at liamdelaney2011@gmail.com

Speakers:

Liam Delaney: Overview of behavioural economics, policy and business.

Michael Daly: Psychology, Self-Control and Policy

Sean Gill: Behavioural Economics and Health

Pete Lunn: Behavioural Economics and Regulation

Audience Contributions,

Q+A and Suggestions for Development of Network

Considering the Greek Crisis

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July 14th, 2015

The NBER organised a panel on the Greek crisis last week – video here.

More miscellaneous irritations

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July 13th, 2015

1.  “We averted the plan of a financial choking and banking system collapse.” (Tspiras)

You are the prime minister Mr Tspiras. Did you not have a plan B to deal with ECB blackmail? If not, why not? Did you really think that the others would back down because of the possibility of Grexit, when it was so clear that you would be willing to do almost anything to avoid it?

2. The new (and conveniently self-interested) German doctrine that defaults are impossible within the Eurozone. Remember the no bailout clause? Ashoka Mody is surely right: these negotiations will kill the entire European project sooner or later. Better to let countries default when that is what is required.

3. Nice to hear Merkel saying that Greece may win back her trust. If I were Greek I might not trust European promises regarding debt rescheduling. Have we not heard those before?

4. How high is Greece’s debt to GDP ratio going to be now? Over 200%? Even if there is some reprofiling, does anyone think this makes sense?

All in all a great day for Golden Dawn. As for the rest of us: I don’t suppose that any other left wing party that may come to power in the future seeking to challenge the current European economic policy mix will be as feckless as the Tspiras government. The lesson that they will draw from this debacle is: negotiating with Germany is a waste of time; be willing to act unilaterally, be willing to default unilaterally, have a plan for achieving primary surplus if you haven’t already achieved it, have a hard default and euro exit (now possible, thanks to the Germans) option in your back pocket, and be willing to use it at the first sign of hassle from the ECB. A deal could have been done today that would have strengthened the Eurozone, but instead it has just become a lot more fragile.

Update: Wolfgang Münchau is well worth reading, here.

Update: this is also well worth a read.

Update: Charles Wyplosz is well worth reading here. Good to see someone pointing out the obvious about this extraordinary programme, and also taking on the (to my mind bizarre) argument that the headline debt/GDP ratio is irrelevant.

Update: Dae Woong Kang and Ashoka Mody offer a historical perspective here.

SSISI – 2015/2016 Call for Papers & Barrington Medal

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July 10th, 2015

The site’s readership might be interested in two announcements by the Statistical & Social Inquiry Society of Ireland:

  1. The first is a general call for papers [PDF] for the Society’s 169th Session, with a deadline of August 7th. Papers are presented to the society and then published in its Journal, which has – if I’m not mistaken – been going since the 1840s, which must make it one of the world’s longest-running social science journals.
  2. The second is the specific call for submissions for the Barrington Medal, which is intended to recognise promising new researchers in the economic and social sciences in Ireland. More details are available here, and the deadline is July 31st.

Miscellaneous irritations

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July 7th, 2015

1. I see that Juncker is saying that it is a shame that the Greeks walked out of the negotiations last week; and yet the creditor negotiating stance seems to have been “give us everything we want, and maybe we will discuss what you want (debt relief) at some later date”. For an account of the negotiations, see here.

2. I see that Hugo Dixon was describing the parties that got Greece into this mess over the course of several decades as “pro-European”, implying that Syriza is anti-European. Come again? Since when does opposing a particular policy mix (in this case one that has failed disastrously over the course of several years) make you anti-European?

3. I see that Martin Schulz is now denying having said that a no vote meant that Greece would have to leave the euro.

4. I can’t count the number of times I have heard French friends tell me that the problem is that the Greeks don’t pay taxes. (All Greeks, you understand.) What about Troika officials?

5. Aside altogether from the immense catastrophe of the last several years, Greece’s GDP shrank 0.4% in the last quarter of 2014, before Syriza got to power. Just saying.

6. Like Paul Krugman, I gave a cheer when I read Wolfgang Münchau’s stating the obvious:

What I found most galling was the argument that Grexit would bring about an economic catastrophe, as though the catastrophe had not already happened.

Some of the crocodile tears being shed on Sunday night about the humanitarian catastrophe that the Greeks were now supposedly bringing down on themselves (as if the ECB’s refusal to ensure financial stability in that country is irrelevant) I found pretty hard to take. Where have these humanitarians been hiding for the last seven years?

7. No comment necessary:

SPIEGEL ONLINE: Herr Fuest, angenommen, Sie wären wahlberechtigt, wie würden Sie am Sonntag beim griechischen Referendum über die Reformpolitik abstimmen?

Fuest: Mit Ja. Nachdem Ministerpräsident Tsipras sein politisches Schicksal an den Ausgang der Wahl gebunden hat, wäre mein primäres Ziel, ihn und seine Regierung loszuwerden.

8. Faymann: “Europe is known for compromises. Renegotiation until the last minute. Greece didn’t do this when it walked out of negotation.” The Greeks have been making compromises for months; where is the German compromise on debt relief?

There, that feels better.

On the bright side, it seems that around 80% of young Greek voters voted no.

 

 

Thoughts on the Design of Grexit

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July 6th, 2015

Paul Krugman has a thoughtful op-ed piece in today’s New York Times in which he reluctantly calls for Greek exit from the euro. I share his view on the desirability of Grexit at this juncture, but not his reluctance in expressing that opinion. How could Grexit best be designed, for Greece, for Europe, and for international interests? Below are a few modest thoughts on this. Read the rest of this entry »

McCarthy and Mody on what the Greek fiasco tells us about the ECB and IMF

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July 5th, 2015

Here, and here.

Three questions arise. Why would any non-European country be willing to accept another European IMF head? Would it not be better for the Europeans themselves if a non-European IMF head provided us with an “adult in the room” at times of crisis? And why would any European be happy living in a monetary union in which a politicized central bank cannot be relied upon to act as a lender of last resort, and in which their guns could be turned on any (sufficiently small) member state in a time of crisis?

Syriza’s illusory ‘silver bullet’ compounded wasted reform opportunities

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July 4th, 2015

Today’s Irish Times carries my views on the immense damage that the Syriza-led government has done to the Greek economy in a short space of time. Link is here.

Impact of the economic recession and subsequent austerity on suicide and self-harm in Ireland: An interrupted time series analysis

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July 3rd, 2015

New article by Paul Corcoran, Eve Griffin, Ella Arensman, Anthony P Fitzgerald and Ivan J Perry - here.

 

Macro-Prudential Policies

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July 3rd, 2015

The Bank of Lithuania is hosting a conference on this topic today – materials here (including a presentation by Mark Cassidy of Central Bank of Ireland).

Summer 2015 Issue of ESR

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July 3rd, 2015

Articles

Network Social Capital and Labour Market Outcomes: Evidence For Ireland PDF
Gerard Brady 163–195
Spillover in Euro Area Sovereign Bond Markets PDF
Thomas Conefrey, David Cronin 197–231
A Formal Investigation of Inequalities in Health Behaviours After Age 50 on the Island of Ireland PDF
Eibhlín Hudson, David Madden, Irene Mosca 233–265
Is Fuel Poverty in Ireland a Distinct Type of Deprivation? PDF
Dorothy Watson, Bertrand Maitre 267–291

Policy Section Articles

Deciphering Ireland’s Macroeconomic Imbalance Indicators: Statistical Considerations PDF
Mary Cussen 293–313
Policy and Economic Change in the Agri-Food Sector in Ireland PDF
Cathal O’Donoghue, Thia Hennessy 315–337