Author: Stephen Kinsella

Senior Lecturer in Economics at the University of Limerick.

10th INFINITI Conference on International Finance

The site is live here, the programme looks excellent, and the guest speakers are world class. From the site:

2012 is a special year for us. It will be the 10th year of running the INFINITI Conference on International Finance, in conjunction this year with the Journal of Banking and Finance. Over the last ten years, we have been privileged to have had keynote speakers such as Ike Mathur, Raman Uppal, William L Megginson, Edward Kane, Andrei Shleifer, Robert Engle, Maureen O’Hara, and Elroy Dimson. We have also been fortunate to have been joined by many other leading academics, students and practitioners who have openly shared and discussed each others’ latest research.

Our keynote speakers for 2012 are Carmen Reinhart and Iftekhar Hasan.

We hope that you will be able to join us this year, and to that end are pleased to announce that the Call for Papers has been sent out and the online paper submission facility is now open. Please see the full call here.

We would also like to draw your attention to a call for papers for a special issue of RIBAF.

2012 will be a great year, and we hope to see you here at Trinity College Dublin for yet another fantastic INFINITI Conference on 11-12 June.

A DRAFT of the conference paper sessions is available at https://www.openconf.org/infiniti2012/openconf.php. Note however that this is not finalised, and that it omits as yet the details of a number of special sessions on the future of the euro, financial regulation etc.

Industrial production in Ireland is down

Given that we are in Fiscal Compact mode here on the site, I thought I’d make a point about industrial production in Ireland. Today’s monthly release of the Census of Industrial Production (.pdf) shows up a few interesting features of the Irish economy. The CSO report that the seasonally adjusted volume of industrial production for Manufacturing Industries for the first quarter of 2012 was 5.2% lower than the preceding quarter, but the seasonally adjusted industrial turnover index for Manufacturing Industries increased by 3.2% in March 2012 when compared with February 2012 and actually increased on an annual basis.

I thought I might dig into this a little. The chart below shows monthly data from 2007 on industrial production for the ‘modern’ sectors of chemicals, pharmaceuticals, recording media, and medical devices, and individually the key exporting pharmaceutical and chemical sectors. Seasonally adjusted and indexed to 2005, then, we have the following:


Which shows that, for these key sectors on a seasonally adjusted basis there has been a marked drop since the end of last year. Before we all go shorting Ireland just yet though, to put these figures in a bit more context, here’s the same series averaged annually, with the last period averaged quarterly for 2012.

There’s still a decline, but it’s not quite the patent cliff Frank Barry has been highlighting recently. Definitely a series to watch however. Here’s the turnover statistics for the two chemical sectors, they don’t produce one for the modern sector:

We can clearly see more of a drop , but it’s a bit too soon to tell where this series is headed. Again, one to watch.

Why are Irish house prices still falling?

Gerard Kennedy and Kieran McQuinn from the Central Bank give their view on where house prices should be in Ireland, and why they haven’t stopped falling in this new paper (.pdf). This paper is a kind of update to Morgan Kelly’s 2007 piece on the likely extent of house price falls (.pdf) as well as other papers.

From the abstract of Kennedy and McQuinn, then:

In this note, the continued fall in Irish house prices is examined. The increased rate of decline in 2011 resulted in Irish prices being almost 50 per cent down from peak levels of mid 2007. Accordingly, in over forty years of house price data, the fall is now one of the most significant across the OECD. We outline the current state of activity in the housing market and, using a suite of models, assess whether the fall in house prices is in line with that suggested by current fundamental factors within the Irish economy. Given that the analysis suggests prices may have overcorrected since 2010 we discuss possible reasons for this continued decline.



17% of NAMA sold to Unnamed Investors

Jagdip, as ever, has the story, check it out here. Anyone know who these investors are or might be?

Eurostat debt figures released, Irish debt/GDP at 108.2%

Details here. The deficit is now below 10%, which should if I’m right be the talking point on official press releases and the news tonight and such. The target in the budget (here, page 18) was 10.1%. The Budget target for debt in 2011 was and from the footnotes (remember Tom Waits’ quote about the small print):

Ireland: Eurostat is expressing a specific reservation on the data reported by Ireland, due to the fact that the restructuring plans of Allied Irish Banks and Irish Life & Permanent are not yet finalised. These restructuring plans have been used by the Irish statistical authorities to calculate in the reported figures a (deficit increasing) capital transfer element of 3.7% GDP arising from the July 2011 government injections into the two banks. Eurostat awaits the finalisation of the restructuring plans, including approval by the EU competition authorities, so that the amount of the capital transfer element can be confirmed.

Eurostat is also expressing a specific reservation on the data reported by Ireland, due to the statistical classification of National Asset Management Agency Investment Limited (NAMA-IL), which is currently classified outside the general government. Owing to the nationalisation of one of its previously private beneficial owners, whose interest is currently under a process of sale, NAMA-IL has been in majority public ownership since July 2011. Eurostat’s decision of 15 July 2009 on public interventions during the financial crisis specifies that majority private ownership is necessary for such an entity to be classified outside the General Government sector.

Another reservation might be with respect to nominal GNP, where the debt ratio now stands at roughly 131% (169/129).