Many congratulations to Philip who has been formally appointed as the ECB’s new chief economist. The next few years are likely to be challenging ones for the Eurozone, and so it’s good to see an economist trained on the briny shores of the Atlantic being appointed to the position.
The Foundation for Fiscal Studies presents the annual Miriam Hederman O’Brien Prize to recognise outstanding contributors in the area of Irish fiscal policy. The aim is to recognise those who promote the study and discussion of fiscal, economic and social policy. This forms an important part of the Foundation’s objective of promoting understanding and knowledge in these areas
Call for Nominations
Nominations are invited for work completed during 2018 that has added to the public knowledge or understanding in areas such as taxation, public expenditure and other related fiscal policy topics. These contributions may include research papers, reports, books, book chapters, blog posts, opinion pieces, newspaper articles, television or radio contributions/documentaries or any other method which has publicly provided new and relevant insights into these topics in Ireland.
A shortlist of nominations will be compiled with the winners selected by a judging panel for the Prize. The judging panel will consist of national and international experts and is chaired by FFS Chairman.
The successful contribution will be awarded the Miriam Hederman O’Brien Prize which includes a cash prize of €1,000 and commemorative Gold Medal. The judging panel may also recognise other contributions from different categories or other types of contributions and award them appropriately.
Criteria / Eligibility
· The Prize is for work completed during the period 1 January 2018 to 31 December 2018.
· There are no age or nationality criteria.
· No individual may be awarded the Prize more than once.
· Jointly-produced work will be considered, provided that no contributor has previously been awarded the Prize.
The Nomination Process
· The closing date for nominations is 15 May 2019.
· Those making nominations should briefly specify (100-150 words) why they believe the work is suitable for consideration for the Prize. They should also provide a weblink or other details of the work being nominated.
· Those making nominations may nominate more than one piece of work.
· Those making nominations are encouraged to nominate any pieces of work they feel meet the criteria for the prize, regardless of whether or not they themselves are the author. Authors may also nominate their own work.
· Nominations for the Prize should be made by email to firstname.lastname@example.org.
Wednesday April 3rd 2019
National University of Ireland, 49 Merrion Square E, Dublin 2
‘Micro-Businesses in Ireland: From Ambition to Innovation’
Authors: Dr. Jane Bourke & Prof. Stephen Roper
Launched by Senator Pádraig Ó Céidigh
‘Supporting Micro-Business Growth in Ireland’
Chair: Prof. Stephen Roper (ERC & WBS). Panel: Senator Padraig O’Ceidigh, Sven Spollen-Behrens (Small Firms Association), Lisa Collins (Micro-Business Owner), & Dr. Jane Bourke (UCC & ERC)
As places are limited please register here
Further information is available here
Professor David O’Mahony, former UCC Professor of Economics, passed away on March 10th. He was Professor of Economics in UCC from 1964 to 1988.
A highly-respected scholar, his works include The Irish economy: an introductory description (1964), Ireland and the EEC: political, legal and economic aspects (1972) and The general theory of profit equilibrium: Keynes and the entrepreneur economy (1998) (with Connell Fanning). In addition, he authored several Economic Research Institute (now ESRI) papers, in particular on collective bargaining and industrial relations.
Professor O’Mahony was widely held in great respect and affection by colleagues and students alike and will be sadly missed.
Funeral arrangements: https://rip.ie/death-notice/professor-david-o-mahony-sunday-s-well-cork/382183
The 42nd DEW Annual Economic Policy Conference will take place on 13/14 September 2019 in Clayton Whites Hotel, County Wexford. DEW is Ireland’s longest standing and premier forum for economic policy debate. Founded in 1977, the annual economic policy conference is attended by policymakers, academics and practitioners with a focus on evidence-based policymaking. We are now in the process of assembling speakers for this year’s event and would like to invite a call for papers in the following areas:
- The economics of health
- Sustainability & climate change
- Small open economies
- Labour market
- 20th Anniversary of the Euro
Submissions should be sent to email@example.com. All submissions will be treated fairly but cannot be guaranteed to be accepted for inclusion in the conference.
Here is a somewhat longer version of an Op Ed I wrote for a recent edition of the Irish Independent.
The article is based on the accompanying Table, of which the current version is drawn from last year’s Issues Paper (p.52) published by the aviation regulator’s office. The Table aims to set out, comprehensively and (crucially) ex ante, all of the different ways in which a projects costs might differ from the projected costs – some good, some not so good, some catastrophic – and the appropriate regulatory policy for each.
How are we to protect taxpayers from outrageous cost escalation on public investment projects that draw from a finite pool of taxpayer funds and thereby squeeze out other plans? There may be lessons from the approach of regulatory offices that organise their assessment of capital expenditures with a view to protecting, for example, airport passengers from costs overruns on major projects such as the second terminal (T2) at Dublin airport.
The Statistical & Social Inquiry Society of Ireland [ssisi.ie]
invites you to attend the 2019 Barrington Lecture on the following topic:
By: Daragh Clancy (European Stability Mechanism)
to be delivered on: Thursday 21st February 2019 at 5.30pm
at the: Royal Irish Academy
The proposer of thanks is Professor Frank Barry, Trinity College Dublin.
Abstract: We examine spillovers to the Irish economy from US corporate income tax rate cuts and find they lead to a small but persistent increase in Irish output. Our analysis of the transmission channels shows that this expansion is largely driven by an increase in investment, employment and exports in the externally-financed industrial sector. We also find that spillovers from US corporate income tax cuts are larger when the Irish economy is already expanding. Our findings suggest that the changing structure of the Irish economy means any spillovers to real economic activity from the recent US corporate tax cuts could be relatively minor. However, the shifting focus of foreign multinational corporations’ operations in Ireland means that there is a risk of a capital outflow.
Non-members are welcome to attend and participate in the discussion.
Books Upstairs is very kindly hosting myself and Paul Gillespie at 6.30 pm on Thursday 28th February. We will be discussing my book, and no doubt the latest state of play as well. Space is limited, so those interested should email firstname.lastname@example.org to reserve a place.
The 33rd Annual Irish Economic Association Conference will be held in The River Lee Hotel, Western Road, Cork City on Thursday May 9th and Friday May 10th, 2019.
The Association invites submissions of papers to be considered for the conference programme. Preference will be given to submissions that include a full paper. Papers may be on any area in Economics, Finance and Econometrics.
The deadline for submissions is Tuesday 19th of February 2019 and submissions can be made through this site.
This year’s Irish Postgraduate and Early Career Economics Workshop will be hosted by the Discipline of Economics at NUI Galway on Thursday June 6th and Friday June 7th. The event is aimed at PhD students, PostDocs, early career researchers and advanced Master students based in higher education and research institutions on the island of Ireland. The meeting will feature the work and findings of scholars in economics and related fields, and will provide an excellent opportunity to present research results and work-in-progress in a welcoming and constructive environment. We strongly encourage those working on economics-related research to submit.
This year the workshop will include a range of thematic sessions and training events. For participants with a full paper, thematic sessions with discussants will be available i.e. after your presentation, a discussant will present a brief assessment of your paper with feedback. For participants with early-stage/emerging research findings, thematic sessions with general open discussion of your research will be available. Both will take place on Friday June 7th, along with a short training session on ‘Publishing your Research in Peer-Reviewed Journals – Tips from Journal Editors’. In addition, a workshop on ‘An Introduction to Machine Learning for Economists’ will take place on the afternoon of Thursday June 6th, followed by a social event that evening. A full schedule will be announced in due course.
As the workshop and associated training events are free to attend, no financial assistance for travel or accommodation can be provided. Researchers wishing to submit their work for consideration are advised to submit a 2-page extended abstract to IPECE2019@gmail.com. Applicants are asked to include their name, institution or affiliation, and current academic status (PhD, PostDoc, Early Career, Masters) when submitting an abstract. Please also indicate if you would like to present at a discussant session. All of the above information should be attached in a single PDF or Word File and the deadline for abstract submission is Monday April 1st. Applicants will receive notification shortly afterwards. Please note that if you wish to be considered for a discussant session, you will be expected to submit a full paper by Monday May 20th.
The local organising committee consists of Laura Carter, John Cullinan, Jason Harold, Dan Kelleher, Doris Laepple, Shikha Sharma and Michelle Queally at NUI Galway. Please direct inquiries to IPECE2019@gmail.com.
Generous support from the Irish Economic Association (IEA) and the Discipline of Economics at NUI Galway is gratefully acknowledged.
I have been puzzled since the withdrawal agreement terms first emerged that the UK is to be credited with no more than its subscribed capital on exit from the European Investment Bank. The EIB makes serious money, has not paid dividends and must be the most solvent bank around, This from the House of Lords Committee yesterday:
‘The Government failed to provide a satisfactory explanation of its negotiation position on the return of the UK’s capital. As a profitable business, there seems to be a plausible case that the UK should receive some share of that profit. A 16.1 percent share of the EIB’s retained earnings would be €7.6 billion, almost 20 percent of the UK’s financial settlement of £35–39 billion.’
The UK gets just €3.5 billion. The implied price-to-book is a steal for the surviving shareholders.
Central Bank of Ireland Governor Philip Lane will deliver the 2019 Monsignor Pádraig de Brún Memorial Lecture, entitled Climate Change and the Financial System, at NUI Galway on Tuesday, 5 February. All sectors of the economy will be affected by climate change, whether through exposure to weather-related shocks or the economy-wide transition to low-carbon means of production and consumption. These structural changes will require considerable investment by households, firms and the government to retrofit buildings and switch to low-carbon production techniques and transportation methods.
The funding of this investment is just one of the challenges facing the financial system. In addition, it must cope with carbon-related market risks and credit risks, a reduction in the insurability of climate-vulnerable regions and activities and the tail risks of macroeconomic and financial instability. Given the scope and severity of these risks, addressing climate change is now high on the policy agendas of the central banking and regulatory communities. Accordingly, this lecture will outline the climate-related work agenda facing the Central Bank of Ireland.
The biennial public lecture is held in honour of Monsignor de Brún who served as University President from 1945 until 1959. The memorial lectures have been running since the 1960’s with Professor Stephen Hawking giving a lecture in 1994 on “Life in the Universe”.
The event is free and open to the public, however those who wish to attend must pre-register at: https://www.eventbrite.ie/e/climate-change-and-the-financial-system-tickets-54910693362?aff=ebdssbdestsearch
CHAPTER 8: BREXIT
- Young (1999), p. 483.
- The speech is available at https://www.margaretthatcher.org/document/113686.
- Young (1999), p. 479.
- Grob-Fitzgibbon (2016), pp. 438–9.
- The speech itself, as well as a superbly useful range of accompanying documents, is available at https://www.margaretthatcher.org/archive/Bruges.asp.
- Young (1999), p. 423.
- Grob-Fitzgibbon (2016), p. 451.
- Grob-Fitzgibbon (2016), p. 453; https://www.nybooks.com/articles/1990/09/27/the-chequers-affair/.
- A reference presumably to the European Commission’s Commissioners.
- Cited in Seldon and Collings (2000).
- Young (1999), p. 362.
- Young (1999), p. 433.
- I have put the word ‘victory’ in inverted commas to highlight the way in which much of the British political class and media have traditionally portrayed EU negotiations in terms of victory and defeat, rather than compromise and mutual benefit.
- The origins of these numbers, which seem arbitrary, are murky. On one account the 3 per cent figure is, like VAT, a gift from France to the world: see https://www.latribune.fr/opinions/tribunes/20101001trib000554871/ a-l-origine-du-deficit-a-3-du-pib-une-invention-100-francaise.html.
- Which is why I and 38 other Irish citizens were able to stand for election in the French municipal elections of 2014. And it should be noted that there were also 389 British candidates; see http://www.lefigaro.fr/politique/le-scan/decryptages/2014/03/19/25003-20140319ARTFIG00358-d-o-viennent-les-candidats-etrangers-aux-municipales.php.
- See Eichengreen and Wyplosz (1993) for a detailed account of the EMS crisis of 1992–3. Like all the Brookings Papers it is freely available online at https://www.brookings.edu/project/brookings-papers-on-economic-activity/.
- Young (1999), p. 369.
- Both statements are equally true of the Clinton years.
- https://www.bbc.co.uk/news/uk-politics-37550629. 23. Shipman (2017), p. 6.
- Kenny and Pearce (2018). 25. Ibid., pp. 131, 145.
- Shipman (2017), p. 7.
- Ibid., p. 8.
- Delors’s statement is available at https://core.ac.uk/display/76794060; the quotations in the text are taken from pp. 17–18.
- Gstöhl (1994).
- Shipman (2017), p. 15.
- Available at http://www.consilium.europa.eu/media/21787/0216-euco-conclusions.pdf.
- Shipman (2017), pp. 588–9.
- See O’Toole (2018).
- See for example https://www.cbc.ca/news/world/boris-johnson-european-union-hitler-1.3583108.
- Although I was a member of the Centre for European Reform’s Commission on the UK and the Single Market, I declined to sign a resultant letter to the newspapers on what the UK ought to do, as well as similar subsequent efforts, for two reasons. First, I’m not British, and I know from the Irish experience how irritating it is to have foreigners telling you what to do at times like this. And second, it wasn’t at all clear to me that economists’ letters were particularly helpful. On that score at least, I think I was (unfortunately) right.
- The statement led to a sharp rise in the British pound and a bigger subsequent collapse, all of which helped certain lucky investors to make a lot of money (Shipman 2017, pp. 432–4).
Happy new year to all. In case some of you missed it, the Department of Finance published two working papers (by Gavin Murphy, Martina Nacheva and Luke Daly) just prior to Christmas looking at the ever topical issue of Ireland’s output gap. Both papers can be accessed at this link. The first paper takes a detailed look and review of the main methods used to estimate the cyclical position of an economy. The authors highlight the diversity of modelling approaches used across institutions both within Ireland and abroad. The second paper outlines in detail the methodology used by the Department to produce estimates of the output gap for Ireland. To date, the Department has used the European Commission’s harmonised approach (i.e. common to all EU Member States), which has at times resulted in counterintuitive estimates of Ireland’s cyclical position. This research seeks to develop more plausible estimates taking better account of the nature of Ireland’s small open economy. Such work will enable the Department to better evaluate the appropriate fiscal stance and the sustainability of public finances over the medium term. For those with an interest in macroeconomic modelling and forecasting as well as fiscal policy related issues, the papers offer an invaluable source of information into what can be a complex area.
Many of the sources cited in A Short History of Brexit, particularly in the later chapters, are freely available on the internet. I am reproducing the book’s endnotes here so that these can be easily accessed by interested readers.
This post lists the notes for chapters up to and including Chapter 7. The notes for Chapters 8-11 and the Envoi are available here.
The latest edition of the Economic and Social Review is now available (Vol 49, No 4, Winter 2018) containing the following articles:
The Impact of Displacement on the Earnings of Workers in Ireland by Nóirín McCarthy and Peter W. Wright
Incumbency Advantage in an Electoral Contest by Matthew T. Cole, Ivan Pastine and Tuvana Pastine
Re-Examining the Relationship Between Export Upgrading and Economic Growth: Is there a Threshold Effect? by Saafi Sami and Nouira Ridha
Policy Section Articles
Making the Worst of a Bad Situation: A Note on Irexit by Ronald B. Davies and Joseph Francois
Optimum Territorial Reforms in Local Government: An Empirical Analysis of Scale Economies in Ireland by Gerard Turley, John McDonagh, Stephen McNena and Arkadiusz Grzedzinski
Irish Economic Association Annual Conference 2019
The 33rd Annual Irish Economic Association Conference will be held in The River Lee Hotel, Western Road, Cork City on Thursday May 9th and Friday May 10th, 2019. Seamus Coffey (Department of Economics, University College Cork) is the local organiser.
The Association invites submissions of papers to be considered for the conference programme. Preference will be given to submissions that include a full paper. Papers may be on any area in Economics, Finance and Econometrics.
The deadline for submissions is Tuesday 5th of February 2019 and submissions can be made through this site.
Under this rather stark headline, the National Transport Authority (NTA) issued a press statement on 2nd October last, giving a little under a month for responses to be received. The NTA was proposing, for reasons set out in a consultation paper and technical report to award a further five-year monopoly to Dublin Bus.
A decision is due from the NTA Board this month (see item 8).
On its establishment, the NTA’s first act was to award an initial five-year monopoly to Dublin Bus (as well as to Bus Eireann and Irish Rail). Five years later, which was five years ago, a second almost-complete monopoly was awarded, except that 10% of services were to be tendered for competitively. Bus users will see that these services are just now beginning to be operated by Go-Ahead in certain parts of Dublin.
Now, the NTA proposes to tender no more. Some competition-sympathising acquaintances and I have made a submission to the Authority for its consideration. Here is the executive summary; the Association referred to is a new group, the Competition Advocacy Association (of which more later):
Continue reading “NTA RECOMMENDS NO FURTHER TENDERING OF DUBLIN BUS SERVICES (updated)”
I have just published a short history of Brexit. In the latter chapters, dealing with the Single Market, Brexit, and the subsequent negotiations, a lot of the (mainly official) sources used are freely available online. In order to make it easier for the interested reader to consult these sources, and find out more about the EU and Brexit, I am reproducing the endnotes below.
Cher lecteur, chère lectrice: veuillez trouver ci-dessous, comme promis dans mon livre, les notes de bas de page. J’espère que cela facilitera ceux et celles qui souhaitent approfondir encore davantage leur connaissances sur l’Union européenne, le Brexit et les négociations sur le Brexit. A ce jour les liens fonctionnent tous, mais si vous trouvez des erreurs faites-le moi savoir et je ferai le nécessaire.
Cork University Business School & Department of Economics
is pleased to invite you to the
Second Annual Longfield Lecture in Economics
Professor John Fitzgerald
Adjunct Professor of Economics, UCD and TCD
The Phoenix and the Ashes – 60 years of Irish economic policy
Thursday 18 October 2018
Venue: Kane Building, Room G02
All are welcome
About the speaker
Professor Fitzgerald is one of Ireland’s foremost economists. He is currently an Adjunct Professor in both TCD and UCD, having previously been a Research Professor in the Economic and Social Research Institute in Dublin. He is a member of the Central Bank of Ireland Commission and he is Chairman of the Irish government’s Climate Change Advisory Council.
About the lecture
Instead of ushering in a period of economic success, the first 40 years of independence saw a serious underperformance by the Irish economy. Ireland missed the free trade boat after the Second World War and, unlike the rest of Northern Europe from the Urals to Snowdonia, it did not invest in human capital.
Policy began to change in the 1960s. EU membership in 1973, and a steady commitment to developing a modern education system, eventually saw Ireland realise its economic potential.
Bad mistakes in fiscal policy in the late 1970s further delayed Ireland’s convergence to an EU standard of living. However, once the fiscal crisis was dealt with and the EU Single Market came into effect in 1993 Ireland grew very rapidly so that by the mid-2000s Ireland had a standard of living above that of the EU15.
Once again unwise fiscal policy, combined with a massive failure of financial regulation, saw Ireland face a major economic crisis in 2008. However, having got into this mess, policy makers made a very good job of extricating the country from the mire. Nonetheless this process was very painful, leaving a legacy of debt and damage to individual households.
The success of the Irish economy has been built on developing an extremely open economy, a sustained policy of investing in human capital, and a very open labour market. All of this has been underpinned by the multiple advantages conferred by EU membership.
Today, the Bank published its fourth quarterly bulletin of the year (Quarterly Bulletin (QB4 – October 2018), containing new projections to 2020.
The economy continues to grow at a robust pace and momentum has picked up since our last set of published forecasts (July). Economic activity remains underpinned by robust and broad based growth in employment and incomes. In turn, underlying domestic spending has gained further momentum reflecting strong consumption and (underlying) investment expenditures. Overall, we see underlying domestic demand growing by 5.6 per cent this year, before moderating to 4.2 per cent in 2019 and 3.6 per cent in 2020. In GDP terms, we expect growth of 6.7 per cent this year, 4.8 per cent in 2019 and 3.7 per cent in 2020. The labour market continues to move towards full employment with the headline unemployment rate expected to be below 5 per cent in 2019 and 2020.
While the outlook remains favourable, a number of significant downside risks remain. On the domestic side, the main vulnerabilities relate to the cyclical strength of the recovery. On the external side, risks centre on Brexit and any further disruptive changes to international tax and trading regimes given the openness of the Irish economy.
Aside from the normal outlook and commentary, the Bulletin contains a number of Boxes highlighting research on some key issues. These include pieces on Brexit, the international economy and risks relating to Corporation Tax flows. The Bulletin also contains a chapter on financing developments in the economy and a signed article examining financial risks and buffers in the Central Bank.
- Macroeconomic Implications of the UK Government Brexit White Paper: A Preliminary Analysis (Box A – page 13)
- International economic outlook (Box B – page 17)
- Risk related to Corporation Tax Flows (Box C – page 33)
On the financing side of the economy, there are pieces on:
- Income Statement Statistics and Ireland’s Banking System (Box A – page 48)
- Retrocession: Reinsuring the Reinsurer (Box B – page 52).
The Bulletin includes a signed article by Doran, Gleeson, Kilkenny and Ramanauskas (2018), on “Assessing the Financial Risks and Buffers of the Central Bank.”
Tim Harford, in his column last Saturday in the Financial Times, laments the innumeracy which pervades the popular press and much of the political debate. There are people unable to remember the difference between a million and a billion constantly pontificating on weighty economic issues of all descriptions in both print and broadcast media. My favourite category of statistical codology is the university ranking tables now produced in profusion by various self-appointed scorekeepers, notably the Times Higher Education Supplement which ought to know better. The Irish newspapers reported last week the sad news that Trinity College Dublin had fallen from 117th best university in the whole wide world to a mere 120th according to this venerable source. It has fallen behind the University of York, the shame of it, and has managed to stay just an inch ahead of the University of Oslo (phew!).
Unreported was the even sadder news that the Cork City football team, last season’s Irish champions, are now ranked a humble 160th in the world, down from the heady heights of 157th this time last year and just a corner-kick ahead of Croatia’s Rijeka FC. This vital info can be gleaned from footballdatabase.com, who must be wondering why their number-crunching attracts so little coverage.
There is a simple reason. Football fans know that these rankings mean nothing whatsoever. If anyone really needed to know whether Cork or Rijeka boasts the better team, say if they were drawn against one another in some competition, the matter takes ninety minutes to resolve. How though do you check if Trinity or Oslo has the better university? A ninety-minute showdown between the staff of the two institutions would be quite a spectacle but could turn ugly.
The attraction of the university rankings for journalists is precisely that they are meaningless and accordingly incontrovertible. The winner in the latest league table for world’s best university was none other than the University of Oxford, whose distinguished alumni include Boris Johnson, Theresa May, David Cameron and just about all the other folks who have been doing such a spiffing job on Brexit. Which does not mean that Oxford is a poor university. It just means that the concept of university league tables is for the birds. Football league tables (based on the results of actual matches between the teams in each league) are at the upper end of respectable scientific practice by comparison. It looks like Dundalk will relieve Cork of their title as the season draws to a close. But since each team will have played 36 games against the rest this really does suggest that Dundalk have the best team.
However daft the concept and dodgy the statistical methodology, the university tables have their uses. The recent declines in the rankings for the Irish colleges have fuelled demands from their presidents for extra taxpayer cash. A few years back the same tables were showing an advance up the rankings, proof positive, according to the same people, that public spending on universities was delivering the goods and should be increased.
Brexit provides another example of the innumeracy which annoys Tim Harford. The UK’s annual and recurring net contribution to the EU budget has recently been running at about £9 billion per annum, a large number with lots of zeroes. This number, not to be confused with the once-off exit bill, has been ventilated by Brexiteers as, quite properly, a potential ongoing benefit to the Treasury of a full exit. Another figure in circulation is the population of the EU-27 which comes in around 450 million, not quite so large a number but lots of zeroes too. There have been regular assertions that the loss of the UK’s money will cause great damage to the finances of the EU-27: the political editor of the Sunday Express Camilla Tominey ventured that it would ‘bankrupt the European Union’ on a BBC programme, without challenge, a few months back. Nobody at the BBC, it would appear, has thus far bothered to divide the larger of these two big numbers by the smaller. The answer turns out to be £20 per head per annum. Total government revenue in the EU-27 is close to £4,000 billion. The UK’s £9 billion will be missed, but not noticed.
Some people are good at figures but most are not and are lost with very large numbers. Tim Harford’s solution is a call for better statistical training in schools and universities. Even at Oxford this looks a wee bit optimistic. There is however no excuse for the sloppiness about statistical matters in well-resourced media organisations. Here’s another very large number: the BBC gets about £3.5 billion per annum from the license fee, surely enough to engage the services of a statistician, or to buy everyone a pocket calculator. (courtesy the Farmers Journal).
Videos of the keynote speeches by former Central Bank of Ireland governor Patrick Honohan and playwright and author Colin Murphy at last Friday’s conference at NUI Galway to mark the 1oth anniversary of the financial crisis can be found here on the website of the Whitaker Institute. I strongly recommend both. Audio podcasts of the two associated panel discussions will be posted shortly.
Jim O’Leary has an op-ed about the Local Property Tax in today’s Irish Times, based on his recent report, How (Not) To Do Public Policy: Water Charges and Local Property Tax, published by the Whitaker Institute at NUI Galway. The report was launched at a conference last month at NUI Galway featuring senior policymakers, public servants, academics and other experts who evaluated the strengths and weaknesses of the policy-making process in Ireland with a view to suggesting how the quality of policy-making might be improved. Highlights from that conference, including videos of Jim’s presentation and Robert Watt’s keynote speech as well as audio of the panel sessions can be found here on the Whitaker Institute website.
The latest edition of the Economic and Social Review (Volume 49, No.3) is now available, containing the following research and policy articles:
Job Insecurity and Well-being in Rich Democracies by Arne L. Kalleberg
Economic Stress and the Great Recession in Ireland: The Erosion of Social Class Advantage by Christopher T. Whelan, Brian Nolan and Bertrand Maitre
Household Formation and Tenure Choice: Did the Great Irish Housing Bust alter Consumer Behaviour? by David Byrne, David Duffy and John FitzGerald
An Analysis of Taxation Supports for Private Pension Provision in Ireland by Shane Whelan and Maeve Hally
1:30pm, Friday, 28 September 2018
The Institute for Lifecourse and Society Building, NUI Galway
In the fateful decade since the collapse of Lehman Brothers and the Bank Guarantee of September 2008, much has happened in Ireland – financial crisis, deep recession, bailout by the ‘Troika’, a protracted period of austerity followed by vigorous economic recovery. But what has really changed over the last ten years? What developments in the financial and political system have taken place and what has been the cultural effect of the crisis? Will we repeat the same mistakes or find ways to avoid them? A major public event convened by the Moore Institute and Whitaker Institute at NUI Galway will examine these questions with a high profile group of participants, including keynote speeches by former Central Bank of Ireland governor Patrick Honohan and playwright and author Colin Murphy.
14:00 – 14:05
Alan Ahearne, Director, Whitaker Institute
Daniel Carey, Director, Moore Institute
14:05 – 14:15
Ciarán Ó hOgartaigh, President, NUI Galway
14.15 – 14:35
former Governor, Central Bank of Ireland
14:35 – 15:35
Chair: Ciarán Ó hOgartaigh
- Angela Knight CBE, former Chief Executive, British Bankers’ Association
- John McHale, Dean, College of Business, Public Policy & Law, NUI Galway
- Frances Ruane, former Director, Economic and Social Research Institute
15:35 – 16:00 Open discussion
16:00 – 16:20 Coffee break
16:20 – 16:40
Playwright and author
Chair: Alan Ahearne
16:40 – 17:45
Chair: Dan Carey
- Stephen Collins, former Political Editor, Irish Times
- Kate Kenny, Professor, Queen’s University Belfast
- Gearóid Ó Tuathaigh, Emeritus Professor in History, NUI Galway
- Fiona Ross, Chair, CIÉ
17:45 – 18:00 Open discussion
This event will take place in the ILAS Building on the north of the NUI Galway campus from 1:30-6pm. A reception with light refreshments will follow the event.
The event is free and open to the public, however those who wish to attend must pre-register.
Today, we have a guest post by Sean Kenny (Lund), who below summarises some lessons for policymakers from a recent working paper with John Turner (Queens) on the Irish banking system before joint-stock banks.
As the Irish economy continues to emerge from the financial crisis of 2008 and the controversial blanket guarantee which followed it, from the comfort of hindsight a number of decisions have been criticised by prominent commentators. In particular, the terms of the bailout package and the shouldering of bank debt by the Irish taxpayer have featured frequently in the debate. In other words, the domestic and international political machinery employed to address the collapse of the banking system was deemed by many to be inappropriate, as events unfolded all too rapidly. Over the critical weekend of the guarantee, concerns were raised that no currency would be available from ATM machines at the open of business the following Monday.
It is interesting to ponder what might have happened under such a scenario where no support mechanism, instead of an inadequate one, had existed and where money may in fact have disappeared from the economy. As my research with Professor John Turner (Queen’s University, Belfast) documents, such was largely the experience during the last Irish banking crisis of comparable scale in 1820. During this era, money consisted of alternative private bank notes which were redeemable in Bank of Ireland notes considered “as good as gold.”
No central bank existed and the Irish and British exchequers had recently amalgamated. If a private bank had lent unwisely, pushing too many of its notes into circulation, when their notes were presented for conversion at their counters, failure could quickly occur if its current loan income and reserves fell short of its short term liabilities (notes and deposits). Of course, this tendency was exacerbated by a lack of regulation on the issue of private currency, a lack of trust in the stability of small private partnership banks and a prevailing political ethos which saw no role for government involvement in ensuring financial stability.
The 1820 crisis, which began in Cork and spread north saw 40 per cent of Irish banks fail within three weeks, leaving large portions of the country with neither currency nor banks for many years. This had predictably adverse effects on the economy as investment and consumption were largely suspended. In a scene many of us are familiar with today, many bankers, consisting primarily of the politically-connected landed elite, shielded their personal estates from liquidators as their banks’ deposits and notes went unpaid, ruining whole communities in turn. In the worst affected areas, money was simply unavailable to pay wages or to engage in trade and so consumption and employment further collapsed while price falls continued as money became scarcer. As a petition signed by the Lord Mayor of Cork put it, “all confidence, as well as Trade, is suspended, there not being sufficient currency to represent property in its transfer”.
During the following five years, a twilight zone emerged from the ashes, during which an insufficient supply of private money in the form of trade bills was circulated amongst the merchant class who constantly petitioned for reform of the entire monetary and banking system. In this era of uncertainty, many survivor banks and businesses failed as debts could not be collected and the Bank of Ireland remained solely in Dublin.
The 1820 crisis marked the beginning of the end of a quarter century which one historian called a “financial pantomime” where more than 20 percent of the banking system failed on at least four separate occasions. Compared with our own age where banks are deemed “too big to fail”, this was an era in which banks were too small to survive with primitive legislation controlling their activities. So utterly decimated was the monetary and banking system following 1820, that new legislation was introduced in 1825 which replaced the small partnership banks with a system of well capitalised joint stock banks with unlimited liability for a large number of shareholders.
This revolutionised the Irish banking system and dramatically improved financial access through the coming decades. No major banking crisis was to visit Ireland again until 2008. In an age where private (crypto) currencies are being promoted as a panacea to the alleged ills of current monetary regimes, it is appropriate to recall that when private money dies, it is not only its holders and issuers who are affected when the scale of its exchange is significant. The demise of this group will reduce their investment, consumption and debt-servicing capabilities, which will in turn affect the wider economy. Instead, the utopia of a well-designed financial system in the context of a political apparatus which minimises the fallout when things go awry, then as now, remains a goal worthy of our finest endeavour.
Conference and launch of new report on water charges and the local property tax
1:30pm, Thursday, 13 September 2018
Aula Maxima, The Quadrangle, NUI Galway
Why do some public policy measures succeed while others fail? Why, for example, has the Local Property Tax been a policy success, while the attempt to introduce water charges was a policy disaster? What can we learn from successful and failed policies about the policy-making process in Ireland and how to make that process more effective?
This conference will gather senior policymakers, public servants, academics, and other experts to evaluate the strengths and weaknesses of the policy-making process in Ireland with a view to suggesting how the quality of policy-making might be improved. Although much analytical attention has been paid to the effects of public policies in Ireland and to the macroeconomic context in which they are set, there has been very little analysis of the policy-making process: How policies are conceived, designed, implemented, communicated, and reviewed. This conference is an attempt to address this gap. View the conference programme here.
The conference will feature the launch of a new Whitaker Institute report by economist Jim O’Leary on water charges and the local property tax. This report, meticulously researched based on exceptional access to senior policymakers, looks back forensically at these two recent policy initiatives and explores what it was about the policy-making process in each case that contributed to success or failure.
This conference is aimed at a general audience and will appeal to anyone with an interest in how public policy is made in Ireland. The event is free and open to the public, however those who wish to attend must pre-register at: https://www.eventbrite.ie/e/how-not-to-do-public-policy-tickets-48552806752
I thought I’d take a break from Brexit and Trump, and write a Critical Quarterly column about the Euro for a change. The main point I take from it now, a few months after writing it, is that we should stop teaching our students that if a currency union faces shocks that are symmetric, rather than asymmetric, then there is no problem. The post-2008 experience teaches us that free rider problems and ideology can lead to very sub-optimal responses even to symmetric shocks.