I’m very excited to announce this blog’s new contributors, who you’ll be hearing a lot more from soon:
- Dr Adele Bergin, ESRI
- Dr Orla Doyle, UCD
- Prof. Carol Newman, TCD
- Prof. Niamh Hardiman, UCD
- Dr. Jane Bourke, UCC
- Dr. John Cullinan, NUI Galway
- Dr. Darragh Flannery, UL
- Dr. Robbie Butler, UCC
- Dr. Fergal McCann, Central Bank of Ireland
- Dr. Aidan Regan, UCD
- Dr. Thomas McDermott, UCC
Larry Summers coined the phrase “The Davos Lie” back in 2007; my latest column in Critical Quarterly covers some of what I’ve written on the subject over the years. Here is another recent piece on the subject.
Irwin Collier has a fascinating blog with archival materials on the kinds of things the great economists taught via their course outlines. He has other stuff up there, but I know readers of this blog will enjoy this site. There’s some Irish work of interest here too: You’ll find references to Cairnes in Orcutt’s 1950 Empirical Economics courses, the work of UCD’s George O’Brien work on mediaeval economic thought appears on the Harvard reading list c.1950, and more.
The Department of Economics at Trinity College Dublin invites applications for a Grattan Scholarship at PhD level, starting in September 2016, on the economics of city regrowth. The funding includes all fees, an annual stipend of €20,000 and a budget for research expenses, over a four-year period. In return, Scholars are expected to undertaking teaching and research assistance as required. Interested applicants are requested to contact Ronan Lyons (firstname.lastname@example.org) by Monday May 16th.
More information is available at this link: The Economics of City Regrowth – Grattan Scholarship 2016-2020
The Statistical & Social Inquiry Society of Ireland is entering its 170th year – which surely means it must rank among the oldest societies of its kind on the planet. As it enters a new year, I would just like to draw the attention of this blog’s readers to the following two notices:
- The Barrington Medal, 2016/17, abstract due by end-July.
- A call for papers for the Society’s journal, with submissions due by early August.
The 2015 Annual Report of the Revenue Commissioners is available here.
They also published a useful article by Paul Tancred on Corporation Tax receipts in 2014 and 2015.
Given that an agreement looks likely, it’s probably worth opening a thread on what commenters believe the new programme for government should contain, what it might contain, what that weird intersection of politics and economics means it will contain.
UCC’s Robbie Butler talks to Frank Conway for the Economic Rockstar Podcast, hopefully embedded below.
The 2015 Annual Report of the CBoI is available here.
There is lots in the report but one point that should be noted is that the €1.8 billion transfer from the Central Bank’s surplus to the Exchequer comes mainly from transactions with the Exchequer itself (interest income) and the NTMA (capital gains on bond sales) so is circular in nature.
The Department of Finance has released a Spring-less Statement (.pdf), showing some interesting debt dynamics projections and a really nice risk-assessment section (see page 26) and their likely impacts on the Irish economy. Brexit figures highly, as one might imagine, but so do other external demand shocks and domestic issues, and the fiscal risks associated with not meeting our climate change targets. The Department writes:
There are fiscal risks associated with a legally binding EU Effort Sharing Decision on climate change covering the 2013-2020 period. Ireland is obliged to achieve a 20 per cent Greenhouse Gas emissions reduction (compared to 2005 levels) in certain sectors. Current EPA projections estimate that Ireland will not achieve this reduction and failure to comply may incur costs of hundreds of millions through the purchase of carbon credits until such time as the target is complied with. Similarly, further new costs may arise in the context of a new EU climate and energy framework for the period 2020-2030, which will set new emissions reduction targets.
The Queen’s Management School, at Queen’s University Belfast, is hiring a Lecturer in Economics. The School is particularly keen to attract those with expertise in macroeconomics; public economics; health, education and welfare economics; and labour economics. More details here. The closing date is next Monday, 25 April 2016.
Jordà, Schularick and Taylor have produced a must-read paper, summarising the results of a decade-long research effort to create a long-run macro-financial data set for 17 countries. The paper is here (.pdf) and they provide some new stylized facts they document should “prove fertile ground for the development of a newer generation of macroeconomic models with a prominent role for financial factors”.
In particular, they document a ‘hockey-stick’ effect of private sector creditto GDP for a range of economies, and one of the hockey sticks can be seen in the figure below. After about 1950, for most of the elements the authors study, finance and leverage takes a more and more central role in the development of modern economies.
UCC’s Dr Tom McDermott is looking to hire a post-doc to work on a project on the economics of flooding (with an Ireland focus). The project is funded by the EPA, and involves collaboration with Swenja Surminski in the Grantham Research Institute, LSE. The job advert is here and closes May 3rd.
(Link updated, thx Enda H.)
The site will be down this coming
Sunday morning Saturday afternoon for maintenance and upgrading. After backing up the database, etc., we’ll be moving the design of the site to the Twenty Sixteen default, which is much better for viewing on phones, tablets, and other devices. We’ll also be adding more features for posters on data and images as well as other upgrades.
There will be more changes coming in the next few weeks, so please bear with us.
Fascinating argument from Daniela Gabor and Jacob Vestergard here.
I posted before about David Bell’s analysis of the Scottish referendum bookies odds. The bookmakers seemed to do a good job not overreacting to the late poll numbers showing a marked swing to Yes. The days before the referendum were throwing up some dramatic poll results but the odds did not adjust as dramatically, implying the bookies were either temporally averaging across polls, had some priors about the quality of the polls, or were doing a degree of Bayesian updating or something similar. David has provided a nice piece here for those looking to keep track of bookies odds for Brexit. For now, it looks like Stay is the favorite by quite a margin and more than one would think just by looking at opinion polls.
Alex Arbuckle shows some fascinating pictures of evictions in Ireland, in the 1880s.
This workshop from UCC’s Dr. Aileen Murphy looks fascinating. Details are here (.pdf).
It seems the European Commission are continuing to ask fresh questions of Ireland on the Apple State Aid case with Commissioner Vestager telling a European Parliament committee yesterday that she did not know when the case would be ready for a decision.
The Financial Times have devoted an article in their ‘The Big Read’ series to the case. See here.
It is available at www.esr.ie/
Vol 47, No 1, Spring (2016)
Table of Contents
ÉIRE Mod: A DSGE Model for Ireland
Daragh Clancy, Rossana Merola 1-31
Revisions to Macroeconomic Data: Ireland and the OECD
Eddie Casey, Diarmaid Smyth 33-68
Wagner in Ireland: An Econometric Analysis
Stephen Moore 69-103
Spillover in Euro Area Sovereign Bond Markets – Corrigendum
Thomas Conefrey, David Cronin 105-107
Policy Section Articles
Taxes, Income and Economic Mobility in Ireland: New Evidence from Tax
Seán Kennedy, Yosuke Jin, David Haugh, Patrick Lenain 109-153
Searching for the Inclusive Growth Tax Grail: The Distributional
Impact of Growth Enhancing Tax Reform in Ireland
Brendan O’Connor, Terence Hynes, David Haugh, Patrick Lenain 155-184
Details of our 4th Irish Behavioural Science and Policy network meet-up are below. Sign up for the mailing list here. Sign up for the event itself here. Registration is free.
The fourth Irish Behavioural Science and Policy Network meet-up will take place on April 25th at 6pm in Dublin city centre (venue tbc). It will end at 8pm. Each meet-up is structured around a collection of short talks, where each speaker describes briefly an idea they are working on (or thinking about), followed by questions, potential suggestions for collaboration between members, and a group discussion on the collection of talks.
This session will focus on applications of behavioural science to public policy. including health applications and the role of design principles. Speakers will include Dan Hayden from UCD, Clare Delargy from the BIT, Eoin O’Malley from DCU and David Hevey from TCD.
All those interested are welcome to attend, so please do share this event information with anyone who you think would like to come along.
We look forward to seeing you on the 25th of April.
This is one way to try to boost your position in the world university rankings.
Another would be to shift admittedly very scarce resources from administrative to frontline staff, so as to keep class sizes under control; remember that the university’s core function was always to provide an excellent undergraduate education, and value those members of staff whose dedication made that possible; and value the outputs of research, instead of the financial inputs into it.
The Eurozone HICP inflation index for February was at roughly the same level it had reached in the early months of 2012. That is to say the inflation rate has been essentially zero for four years.
The cumulative impact of this undershoot on the real burden of debt is getting to be very serious. The ECB’s own forecasts are for just 0.1% in 2016, 1.3% in 2017 and 1.6% in 2018, so they expect the undershooting to continue. By this time next year the price level will have been flat for five years. If GDP deflators had risen at 2% per annum for those five years various indebted countries would have knocked ten points off debt/GDP ratios, other things equal. So the ECB policy failure has consequences and has penalised the countries most heavily indebted.
Unlike the situation in the UK, the USA and other inflation-targeting countries there is not even a clear figure. The phrase (intoned at every Draghi press conference) is ‘below, but close to, 2%’. Why so coy? What does ‘close to’ actually mean? Will the 1.6% predicted for 2018 be deemed to have done the job?
The treaty talks only about price stability so the choice of target is entirely a matter for the ECB Governing Council. The tortured phraseology looks like a compromise – the sound money people getting the ‘below’ part and the rest getting the ‘but close to’. The 2% number had to get a mention, since various central banks had settled on an explicit 2% figure. It would hardly have been feasible to publicly declare a lower target number like 1% and would have had market repercussions. Whichever scribe came up with the form of words has hopefully been promoted.
Suppose the measures announced last week have their desired impact and Eurozone inflation reaches somewhere deemed ‘close to’ 2% in 2018. By that stage the heavily-indebted countries will have been short-changed substantially on real debt burdens. The remedy would be to raise the target, say to 4%, for five or six years in order to compensate, as Olivier Blanchard proposed when he was at the IMF. The indebted countries would be remiss not to push for this when the time comes, assuming the show is still on the road.
Lots of data published today. From the CSO:
The Central Bank have the latest mortgage arrears statistics. The NTMA issued a six-month T-Bill at a yield of –0.22%.
Oxford’s Simon Wren Lewis writes about why you might expect a bump in consumption following a debt shock and then a government spending shock. Well worth reading and thinking about, especially in terms of our rebound in economic growth and the chances of that rebound being permanent (or even semi-permanent).
Reports abound that Irish Water is to die. Fianna Fáil has made Irish Water’s scrapping a pre-condition of any coalition, and sources around Fine Gael are fairly happy to see this toxic object redeveloped, at least in some way. The strategic interaction of the party blocs, the media, and the electorate has cast paying water charges into a mire of uncertainty, forcing the Taoiseach to plead with people to continue to pay their water bills.
All of a sudden, even that slight majority of people who were paying water charges have good reason to doubt whether paying for water services is worth it anymore. Surely if Irish Water is redesigned in some way, water charges of some type will have to keep being made to households and businesses?
There is no point debating how Irish Water should have been set up, or could have been set up. The fact is that it exists today, doing its work at some level of efficiency, what level that might be is anyone’s guess.
What is worth debating is what the likely effects of turning a long run infrastructural investment vehicle, however poorly designed and implemented, into a short term political football, might be.
The Foundation for Fiscal Studies awards an annual prize to recognise outstanding contributors in the area of Irish fiscal policy. A prize of €1,000 will be awarded, together with a commemorative Gold Medal.
Nominations are invited for work completed during the period 2014 and 2015 which 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 or any other method which has publically provided new and relevant insights into these topics in Ireland.
Further details in relation to eligibility are contained in the attached call for nomination.
Last year’s prize was awarded in September 2015 to Rónán Hickey and Diarmaid Smyth for their paper – ‘The Financial Crisis in Ireland and Government Revenues‘ – which is available to read on the FFS website by following the link.
The authors presented their paper and received their prize from Minister Harris at an FFS event in the Mansion House – details here.
Interested parties should note that the closing date for nominations is 30th April 2016 and that nominations of worthy work are encouraged from any party including the authors themselves. Nominations for the Prize should be made by email to email@example.com.
The European Commission have responded to the recent interventions by the US Treasury into the tax related state-aid investigations with this letter from Margrethe Vestager to Jack Lew.
On one of the issues raised by the US Treasury the response is as would be expected:
I also hope we agree that the taxation systems of EU Member States entitle them to tax the profits generated by companies operating in their territory, including US companies. The Commission has the duty to ensure that these rules are applied in a non-discriminatory manner by excluding preferential treatment in any form that constitutes incompatible State aid. This does not put into question the US taxation system or go against double taxation treaties concluded by EU Member States.
So we await whether DG Comp are going to conclude that the estimated $120 billion of profits earned by Apple Sales International between 2004 and 2013 were generated in Ireland and so should be taxable in Ireland as opposed to only those profits earned by ASI’s branch in Ireland. The Commission could also conclude that the allocation of profit to ASI’s Irish branch was “wrong” but if that was to be the case then this ongoing exchange of letters would have been wholly disproportionate.
The Commission are also investigating Apple Operations Europe (AOE). AOE also has an Irish branch which undertakes manufacturing of a specialised range of computers. However, ASI is the global hoover of Apple’s profits – it contracts with third-party manufacturers in China (with all agreements signed in the US) and sells on the products to Apple distributors at an “arm’s length price”. The difference between the fee paid to the manufacturer and the price charged to the distributor is considerable. Hence, the estimated $120 billion of profits earned by ASI between 2004 and 2013, with 90 per cent of that occurring in the final four years of the period.
ASI is a subsidiary of AOE so it is possible that the Commission could rule that the profits are taxable in Ireland when they are distributed as a dividend by ASI to AOE. This could potentially bring our 25 per cent Corporation Tax rate into the equation. But that seems very unlikely. The focus will probably be on the trading profits earned by ASI, though if it ends up being a dispute over the profit allocated to ASI’s Irish branch we really will be left wondering what all the excitement was about.
How long more will they keep us waiting? And if a decision is published by DG Comp is there a timeframe within which an appeal to the CJEU must be made?
One of the less notable events over the weekend was the publication of the European Commission’s Country Reports. The report will form the basis for Country-Specific Recommendations (CSRs) which will be published in May. Here is the Country Report on Ireland for the few who may be interested – Ireland: Country Report 2016