Missing Money

FT Alphaville carries some material on unrecorded outflows from crisis-hit countries here and here.

Today’s CSO release for Ireland shows little progress in recovering/identifying the cumulative €20 billion (approximately) in “net errors and omissions” (a proxy for unrecorded financial outflows) during 2010-2011.


4 replies on “Missing Money”

@Robust economists

Anyone got a reasonably ‘robust’ handle on The Guv’nor’s €100 BILLION?

fyi – very useful

Michael Hudson: Quantitative Easing for Whom?

Posted on March 12, 2015 by Yves Smith

Real News Network released a two-part interview with Michael Hudson on quantitative easing. While the picture is broad-brush, as TV necessitates, the talks provide a good recap of theory, or perhaps more accurately, political justifications for quantitative easing, as opposed to how it works in practice. The second part of the interview focuses on the use and abuse of quantitive easing in the Eurozone crisis.

As Hudson emphasizes, QE is designed to keep banks afloat, and any help to the economy at large is incidental.


fyi worth a thread? Cows no longer sacred!


Did Ireland’s 12.5 Percent Corporate Tax Rate Create the Celtic Tiger?

Posted on March 12, 2015 by Yves Smith

Yves here. Offshore banking and tax haven expert Nicholas Shaxson has launched a new blog, Fools’ Gold, to look at issues of ‘competitiveness’ and so-called ‘competition’ between nations. We’ve often taken issue with that policy goal, since it gives precedence to crushing labor as a way of lowering product prices to stoke exports. This approach is dubious for anything other than small economies, since all countries cannot be net exporters. Undue focus on exports as a driver of growth results in increasing international friction, such as the currency wars that are underway now. Moreover, as we have discussed separately, trade liberalization has gone hand in hand with liberalization of capital flows, in no small measure due to US efforts to make the world safe for what were then US investment banks. Yet Carmen Reinhardt and Ken Rogoff pointed out in their study of financial crises, higher levels of international capital flows are associated with more frequent and severe financial crises.

In addition, lowering wage rates reduces domestic demand. In countries like the US, where the domestic economy is much larger than the export sector, lowering internal demand to stoke exports is misguided. Here we look at a first case study, the real reasons behind the growth and meltdown of the famed Celtic tiger, Ireland.



One Irish textbook (Leddin and Walsh, Macroeconomics, 2013) attempts to unravel the relationship between savings, investment and the balance of payments. Their Chapter 20 actually presents a simplified version of the country’s International Investment Positron.

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