New IIIS research papers

A couple of new papers from the IIIS may be of interest:

Philip R. Lane, Trinity College Dublin and CEPR
Gian Maria Milesi-Ferretti, International Monetary Fund, Research Department and CEPR

IIIS Discussion Paper No. 316

Abstract: We document and assess the role of small financial centers in the international financial system using a newly-assembled dataset. We present estimates of the foreign asset and liability positions for a number of the most important small financial centers, and place these into context by calculating the importance of these locations in the global aggregate of crossborder investment positions. We also report data on bilateral cross-border investment patterns, highlighting which countries engage in financial trade with small financial centers.

Patrick Honohan and Gavin Murphy
Institute for International Integration Studies, Trinity College Dublin

IIIS Discussion Paper No. 317

Abstract

Ireland had been considering a break in the long-standing currency link with sterling for some time when the ideal opportunity of a new exchange rate regime – potentially retaining the sterling link while stabilizing other exchange rates – seemed to offer itself in the form of the “zone of monetary stability in Europe” proposed by France and Germany in April 1978. Based on newly released archives, this paper reviews the evolving attitude of Irish officials and the Irish Government over the following months as the decision gradually shifted to one of breaking the sterling link and rejoining what was little more than an expanded “Snake” arrangement; the UK having decided to stay out. While financial issues were to the fore in the discussions, the final decision to join was based on a strategic vision that Ireland’s economic and political future lay with Europe rather than with the former colonial power.

6 thoughts on “New IIIS research papers”

  1. @Pat Donnelly

    “While financial issues were to the fore in the discussions, the final decision to join was based on a strategic vision that Ireland’s economic and political future lay with Europe rather than with the former colonial power.” (Honohan & Murphy)

    The ‘strategic vision’ was enlightened and sound. Credit where credit is due. Builds on the Whittaker/Lemass decision to open up economy/society – and Lemass certainly saw potential of Europe. I leave comments on implementation of the vision to TKW ……… and simply note that we could with a bit of Lemass’s honesty, principled ruthlessness, integrity, and leadership these days.

  2. This is an un update of a interesting paper by Honohan on the history of the punt. It is a very worthwhle contriution as it examines he history of economic independence, and lack thereof, even in decisions to create a ‘central bank’, which was in reality nothing of the kind.

    The main difference in assessment I would have is that the changes until the early 1990s were more gradualist in nature than Honohan describes, with much the ‘snake’ experience charcterised by more than one eye on Sterling and its gyrations, with frequent alarms for the punt itself. The rupture, and qualitiative change only took place in the ealry 1990s.

    The question of whose interests these policies served, why? rather than what? is still underexamined.

  3. @Pat Donnelly

    “While financial issues were to the fore in the discussions, the final decision to join was based on a strategic vision that Ireland’s economic and political future lay with Europe rather than with the former colonial power.” (Honohan & Murphy)

    The ‘strategic vision’ was enlightened and sound. Credit where credit is due. Builds on the Whittaker/Lemass decision to open up economy/society – and Lemass certainly saw potential of Europe. I leave comments on implementation of the vision to TKW ……… and simply note that we could with a bit of Lemass’ honesty, principled ruthlessness, integrity, and leadership these days.

  4. A fascinating report which puts the current debate on the Euro into perspective.

    If Europe hadn’t offered us a ready-made alternative, would be still be tied to Sterling? Even though Sterling had long lost its global status and was very volatile in the 1970s, it seems we only seriously considered breaking the link when France/Germany offered to revitalise the “snake”. Even then, we were hoping UK would join in which case we would presumably have retained parity.

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