Danny McCoy of IBEC is today’s contributor to the Irish Times series: you can read his contribution here.
Month: January 2009
My thanks to my Bruegel colleague Zsolt Darvas for an interesting set of charts showing GDP per capita in Purchasing Power Standards. If the European Commission’s projections pan out, living standards here will take a hit for sure, but it could be worse: We could live in Austria, Finland or Spain. Of course, GNP per capita is lower.
The Draft Partnership Pact referred to in today’s Irish Times states, in the section on “Stabilising the Financial and Banking Sector”, that government action will seek to “assist those who get into difficulties with their mortgages. In early 2009 a new statutory Code of Practice in relation to mortgage arrears and home repossessions will be brought forward and the mortgage interest scheme will be reviewed”. I’d be interested to hear people’s opinions on this.
Rossa White is today’s contributor to the Irish Times series: “The Time to Take Hard Decisions on Public Pay is Now“.
He concludes by advocating a new system that will avoid fiscal procyclicality in the future, through a ‘golden rule’ policy, plus the establishment of a rainy-day fund.
Institutional reform along these lines is highly important. Indeed, I post a link below to a 1998 article I presented at Kenmare and published in the now-defunct Irish Banking Review, in which I advocate a similar approach. However, I wonder about the political incentives to establish such institutional restraints on the conduct of fiscal policy. Again, the current crisis may provide the right environment for undertaking such reforms.
Philip R. Lane, “Irish Fiscal Policy under EMU,” Irish Banking Review, 1998.
VOX has launched a new initiative that is intended to act as a central forum for an open-format discussion of the global crisis. This promises to be quite interesting (I am acting as moderator for the macroeconomics theme; Luigi Zingales on regulation; Francesco Giavazzi on institutional reform; Dani Rodrik on development; and Richard Baldwin on open markets). You can read more about it here.