Comments on: A Path to Recovery http://www.irisheconomy.ie/index.php/2008/12/24/a-path-to-recovery/ Wed, 16 May 2012 21:24:14 +0000 http://wordpress.org/?v=2.6.3 By: Harry Harmon http://www.irisheconomy.ie/index.php/2008/12/24/a-path-to-recovery/#comment-1274 Harry Harmon Sat, 14 Feb 2009 19:10:43 +0000 http://www.irisheconomy.ie/?p=136#comment-1274 Excellent article, I very much agree with alot of points made.Wage Cuts are only feasible if there is a reduction in the real prices of goods and services in this Country particularly so for Mortgage Holders. For instance,people who purchased property near or at the peak of the boom are under serious financial pressure.They cannot afford a wage cut as this may cause them to go into arrears on their Mortgage and could result in their Financial Institution looking to repossess their property. With jobs being lost everyday public finances are going to come under more pressure.The Government is an absolute shambles and the Minister for Finance is a joker who should resign with immediate effect before he does more damage to the Economy. Excellent article, I very much agree with alot of points made.Wage Cuts are only feasible if there is a reduction in the real prices of goods and services in this Country particularly so for Mortgage Holders.

For instance,people who purchased property near or at the peak of the boom are under serious financial pressure.They cannot afford a wage cut as this may cause them to go into arrears on their Mortgage and could result in their Financial Institution looking to repossess their property.

With jobs being lost everyday public finances are going to come under more pressure.The Government is an absolute shambles and the Minister for Finance is a joker who should resign with immediate effect before he does more damage to the Economy.

]]> By: Kevin O’Rourke http://www.irisheconomy.ie/index.php/2008/12/24/a-path-to-recovery/#comment-98 Kevin O’Rourke Sun, 28 Dec 2008 09:22:49 +0000 http://www.irisheconomy.ie/?p=136#comment-98 Inflation would surely be an easier way of reducing real wages than nominal cuts. And would get rid of these bubble debts that will be a major constraint on policy making in all sorts of ways. Inflation would surely be an easier way of reducing real wages than nominal cuts. And would get rid of these bubble debts that will be a major constraint on policy making in all sorts of ways.

]]> By: Patrick Honohan http://www.irisheconomy.ie/index.php/2008/12/24/a-path-to-recovery/#comment-95 Patrick Honohan Sat, 27 Dec 2008 20:02:51 +0000 http://www.irisheconomy.ie/?p=136#comment-95 Analytically, I guess the competitiveness and public finance issues are about lower nominal wages (private and public sector respectively); conditional on prices -- which are given in the currency union. Rogoffian uniform inflation at the union level could theoretically transfer part of the debt burden to depositors and other holders of nominal assets, but would still leave unaffected the competitiveness and cost of public services. Analytically, I guess the competitiveness and public finance issues are about lower nominal wages (private and public sector respectively); conditional on prices — which are given in the currency union. Rogoffian uniform inflation at the union level could theoretically transfer part of the debt burden to depositors and other holders of nominal assets, but would still leave unaffected the competitiveness and cost of public services.

]]> By: Kevin O'Rourke http://www.irisheconomy.ie/index.php/2008/12/24/a-path-to-recovery/#comment-90 Kevin O'Rourke Wed, 24 Dec 2008 13:51:12 +0000 http://www.irisheconomy.ie/?p=136#comment-90 In response to Alan: the fact that so many bought houses at the peak does seem to me to be a problem, if we are then asking them to take wage cuts. So, I agree this needs to be looked at. Alternatively, how easy is it to declare personal bankruptcy in Ireland? Might this be something to look at also? In response to John: are there good sources online that give a sense of how overvalued our real exchange rate is, that might in turn give us an indication of the magnitude of real wage cuts required? In response to Alan: the fact that so many bought houses at the peak does seem to me to be a problem, if we are then asking them to take wage cuts. So, I agree this needs to be looked at. Alternatively, how easy is it to declare personal bankruptcy in Ireland? Might this be something to look at also?

In response to John: are there good sources online that give a sense of how overvalued our real exchange rate is, that might in turn give us an indication of the magnitude of real wage cuts required?

]]> By: Alan Ahearne http://www.irisheconomy.ie/index.php/2008/12/24/a-path-to-recovery/#comment-88 Alan Ahearne Wed, 24 Dec 2008 11:13:51 +0000 http://www.irisheconomy.ie/?p=136#comment-88 With nominal debts fixed, a drop in nominal wages and prices will increase the real value of debts. Might this be a significant problem? If so, do we need an accompanying renegotiation of debt contracts? With nominal debts fixed, a drop in nominal wages and prices will increase the real value of debts. Might this be a significant problem? If so, do we need an accompanying renegotiation of debt contracts?

]]> By: Mike Harmon http://www.irisheconomy.ie/index.php/2008/12/24/a-path-to-recovery/#comment-87 Mike Harmon Wed, 24 Dec 2008 11:00:30 +0000 http://www.irisheconomy.ie/?p=136#comment-87 Great post. I will read your posts frequently. Added you to the RSS reader. Great post. I will read your posts frequently. Added you to the RSS reader.

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