RGE monitor

Today’s RGE monitor has a feature, or whatever you’d call it, bringing together recent articles on yesterday’s IMF rumours, on intra-EMU government bond spreads, and on the possibility of exits from the Eurozone. The fact that these topics are being linked tells you something about how people are thinking. However, the Buiter and Eichengreen articles linked to by RGE are helpful in stating the case as to why Eurozone membership is so helpful now for countries like us: the counterfactual is pretty scary. The implication of EMU membership however, as many of you have pointed out, is that nominal wage cuts are badly needed (so what on earth are the ESB thinking of?).

Industrial output declines

I have been reading and enjoying www.thepropertypin.com for a few years now. You learn a lot about the Dublin property market, and sometimes about other stuff too.

I recently came across this post which alerted me to recent Eurostat industrial figures that ought surely be getting more airplay. As you can see, in the year to November 2008, industrial output dropped by 7.7% in both the Euro area and in the EU as a whole. There was a wide range in performance across countries:

Among the Member States for which data are available for November 2008, industrial production fell in nineteen and rose only in Ireland (+2.6%). The most significant decreases were registered in Estonia (-17.6%), Spain (-15.1%), Latvia (-13.9%) and Luxembourg (-13.8%).

Now, the question is, are these big numbers or small numbers? Here is a table giving changes in industrial output between 1929 and 1937. Looking at the three-year declines between 1929 and 1932, and comparing these with the one-year declines from 2007 to 2008, my answer is that these are frighteningly big numbers. Industrial output is not declining at the rate experienced in the US or Germany during the Great Depression, but that is setting the bar pretty low. It is declining more rapidly than the average falls experienced in Europe as a whole during that period (although those average falls are unweighted, and thus have a large health warning attached to them).

Monthly Bulletin from Department of Finance

Each month, the Department of Finance releases a compendium of recent data on many different dimensions of Irish economic performance: the link to the January edition (released today) is here.

Back in the Club Med

Today’s FT has a piece which indicates nicely how we are now perceived abroad. The accompanying video is also worth a look.

FT Editorial on the Irish Economy: “A Blue Emerald”

You can read it here