Author: Philip Lane

No Planned Revision to 2010 GDP

There have been a number of comments over the last few days regarding CSO revisions to nominal GDP.  This has been explained in the Irish Independent today as resulting from a change in the way CSO calculate the size of the economy.   Apparently, there were other comments at Kenmare over the weekend also
suggesting that a downward revision to GDP for 2010 is being contemplated by CSO.

I have been talking to CSO and they inform me that there has been no change in how they estimate GDP.   CSO has already published the first two quarterly estimates for GDP in 2010.  Q3 is scheduled for 16 December.

Sovereign Wealth Funds and the Crisis

This analysis piece in the FT provides an interesting overview of the role of SWFs during the crisis (including Ireland’s NPRF).

Fiscal Adjustment After a Banking Crisis

This new IMF paper studies fiscal adjustment in the wake of banking crises. One empirical finding is that large fiscal gap require increases in revenue in addition to expenditure cuts.

Summary: This paper analyzes the experience of 99 advanced and developing economies in restoring fiscal sustainability during 1980 – 2008 after banking crises, which led to large accumulation of public debt. It finds that successful debt reductions have relied chiefly on generation of large primary surpluses in post-crisis years through current expenditure cuts. These savings have been accompanied by growth-promoting measures and a supportive monetary policy stance. While these results are consistent with the existing literature, the paper finds that revenue-raising measures increased the likelihood of successful consolidation in countries that faced large adjustment needs after the crisis. This reflects the fall in effectiveness of spending cuts when deficit reduction needs are large independent of initial tax ratios.

TASC Proposals for Budget 2011

The TASC think tank has produced its proposals for Budget 2011 (a mix of suggested tax and spending proposals, plus recommendations to improve the quality of publicly-available information): the full document is here and the executive summary is here.

Two Seminars at TCD

There are two interesting economics seminars at TCD in the coming days:

1.  Daniel Leigh (IMF) will present the recent WEO study “”Will It Hurt? Macroeconomic Effects of Fiscal Consolidation” 9am-10.30am on this Thursday

2. Gylfi Zoega (University of Iceland) will present a paper next Tuesday 12.30-2 on the Icelandic situation: “Lessons from a collapse of a financial system”

Both seminars are in IIIS seminar room on Level 6 of TCD Arts Block. All welcome.