New IMF WP here.
Month: February 2013
Those of you interested in long run trends in income inequality in Ireland might like to take a look at this piece from the magazine “Significance”. It uses the difference between incomes of the top 10% less the incomes of the top 1% as its summary measure for inequality. It takes a pure time series approach and suggests that for the last 40 years or so there is a 12 year cycle in inequality with a very slight upward trend.
Warning: As John McHale might put it, it is “wonkish”!
http://www.significancemagazine.org/details/webexclusive/4386781/Income-inequality-in-Ireland-from-1922-to-2009.html
On behalf of the EUROFRAME group of research institutes, the ESRI today published a report entitled “Economic Assessment of the Euro Area”.
Among the findings contained in the report are the following:
· As a result of relatively weak external demand, continuing financial uncertainty and the contractionary stance of fiscal policy, output fell in the Euro Area in 2012 (-0.5 per cent). Over the course of 2012 there was a slowdown in some key economies, which were previously contributing much of the growth. This slowdown has carryover effects into 2013.
· Even though we anticipate a recovery in confidence in some major economies over the course of this year, the outcome for the Euro Area as a whole is still likely to be a further limited fall in GDP in 2013 of 0.3 per cent. Weak external demand will not be enough to compensate for the fall in domestic demand.
· For 2014, a recovery in domestic demand should see a return to significant growth in GDP of around 1.3 per cent. However, this forecast must be considered in the light of the continuing vulnerability to financial shocks of a number of the Euro Area member states.
· This vulnerability of countries in financial distress is being addressed through a continuing major fiscal adjustment. However, the fiscal adjustment under way across other members of the Area is also having a substantial negative effect on growth, particularly in the crisis countries. Without this fiscal adjustment the Euro Area would be looking to growth this year at around 1½ per cent and next year at approximately 2 per cent.
Strategic arrears denotes the amount of funds voluntarily not paid on mortgages by homeowners and buy-to-let investors who have the ability to meet the payments but choose not to do so. The available funds are spent on current (non-necessity) consumption or redirected elsewhere, outside the control of the mortgage-holding bank. Distressed arrears are the “can’t pay” component of mortgage arrears and strategic arrears are the “won’t pay” component.
The statement from the Minister for Finance is here.