For those who haven’t heard the sad news, Denis died on January 20. He worked for many years in the ESRI and then, in his ‘retirement’, in NUI Maynooth and UCD. He was a brilliant statistician and a real giant of the Irish Economics world. He was always generous in sharing his knowledge with colleagues, particularly the PhD students with whom he worked. He was also encyclopaedic on local and military history, and an avid hill-walker. He will be greatly missed.
Month: January 2011
This presentation can be found on the Department of Finance website.
The ESRI’s new emigration forecasts are sobering (see here for QEC Press Release). For the year to April 2011, net emigration is forecast to be 60,000, falling to 40,000 for the year to April 2012. The gross emigration forecasts are 75,000 for 2011 and 60,000 for 2012. The numbers are consistent with anecdotal evidence of a resurgence of interest in the emigration option. It is also worrying that significant outflows are forecast in the context of a relatively depressed UK labour market, and despite quite restrictive and skill-biased immigration policies in the destinations of choice: Australia, Canada and the US.
The numbers are a reflection of how limited opportunities are at home for young people, though it would be even worse for those who leave if outside opportunities were not available. The unemployment rate for those aged 20-24 is 25.5 percent. And this is despite a fall in the participation rate from roughly two-thirds in 2008Q3 to half in 2010Q3.
We must also worry about the implications of large-scale emigration for economic recovery. In a thought-provoking post back in November, Kevin O’Rourke drew attention to the danger of an adverse fiscal feedback loop given the large fixed cost of the national debt. We get a form of fiscal increasing returns: the more people leave the greater the tax burden (and indeed the poorer provision of State services) for those who stay, further increasing the incentive to leave.
Over the past week, there have been repeated references during the Fianna Fail heave\confidence vote to the government’s achievement in securing funding for the state for a number of years.
The plan was originally presented as funding the state for three years. However, yesterday on Morning Ireland, Brian Cowen claimed that “funding for the state for the next four years had been organised” while on the Vincent Browne show on Monday night, junior minister Tony Killeen swung for the stars and claimed that we had secured “financing for the state for the next ten years or so”. (15.40 in).
Given the hyperbole\confusion on this matter, I thought it might be worth pointing out a few figures that suggest that the maximum length of time that the deal allows the state to stay out of the bond market is three years and that a more realistic assessment would suggest about two and a half years.
Colm McCarthy has some trenchant remarks on Mr Sarkozy’s recent populist speech: