The Irish Economy

The government has appointed an expert group to advise on this important issue (press release here).

What are the suggestions from the readership of this blog for this new initiative?

The profile article is here.

A couple of new papers from the IIIS may be of interest:

Philip R. Lane, Trinity College Dublin and CEPR
Gian Maria Milesi-Ferretti, International Monetary Fund, Research Department and CEPR

IIIS Discussion Paper No. 316

Abstract: We document and assess the role of small financial centers in the international financial system using a newly-assembled dataset. We present estimates of the foreign asset and liability positions for a number of the most important small financial centers, and place these into context by calculating the importance of these locations in the global aggregate of crossborder investment positions. We also report data on bilateral cross-border investment patterns, highlighting which countries engage in financial trade with small financial centers.

Patrick Honohan and Gavin Murphy
Institute for International Integration Studies, Trinity College Dublin

IIIS Discussion Paper No. 317

Abstract

Ireland had been considering a break in the long-standing currency link with sterling for some time when the ideal opportunity of a new exchange rate regime – potentially retaining the sterling link while stabilizing other exchange rates – seemed to offer itself in the form of the “zone of monetary stability in Europe” proposed by France and Germany in April 1978. Based on newly released archives, this paper reviews the evolving attitude of Irish officials and the Irish Government over the following months as the decision gradually shifted to one of breaking the sterling link and rejoining what was little more than an expanded “Snake” arrangement; the UK having decided to stay out. While financial issues were to the fore in the discussions, the final decision to join was based on a strategic vision that Ireland’s economic and political future lay with Europe rather than with the former colonial power.

There is a new CEPR report on this topic -  this VOX column provides a summary.

A distinguished group of economists have written about the implications of the global crisis for the Nordic countries and the ‘Nordic model’  - summary (and link to the full report) available here.

As reported in the FT Money Supply Blog, the Riksbank has appointed a commission of inquiry to examine risks in the Swedish property market and the implications for Swedish monetary policy: you can read the details here.

A couple of reminders:

• (Self Promotion) “A New Fiscal Framework for Ireland” by Philip Lane (SSISI event at Royal Irish Academy at 6pm; abstract of talk is here.)
• CSO Administrative Data Seminar on February 22nd at Dublin Castle: details here.

This new initiative was briefly mentioned in Saturday’s FT: its goal is to provide a mechanism for economists to provide expert advice to charitable organisations; its organisers are extremely good economists.

You can find the details here.

As suggested by one commentator, this article provides an interesting analysis of the relative merits of US versus Europe for academic economists: you can read it here.

Denis O’Brien recently seemed annoyed at the sight of academic economists blogging and twittering. I am not sure what he would make of the potential emergence of a new trend, academic economists rapping. The link below is to perhaps the first viral economics rap-song, describing the differences of opinion between Hayekian and Keynesian approaches to recession recovery. One of the authors is Russ Roberts, one of the people behind Econtalk podcasts, which are among the best resources for economics on the web. It is actually quite good but does raise the question of where all this might go. “NAMA: The Musical” would be up there for me.

link here

Look at http://www.rae.ac.uk/results/qualityProfile.aspx?id=34&type=uoa

These are the economics results for the most recent Research Assessment Exercise for the UK.

The first numeric column reports the number of staff returned in the subject for each institution: UK departments are comparable in size to many Irish ones.  On the same website, one can browse to a narrative for each department: each institution is specifically required to comment on early career researchers.  Like some Irish deparments, many UK departments are also developing new talent.

Now compare their position in the Tilburg ranking https://econtop.uvt.nl/   to Irish departments. 

Everyone still happy?

Tilburg has produced a ranking of economics departments for the whole world.  See https://econtop.uvt.nl/ .  It is based on journal publications since 2004.  The nice aspect of this website is that you can change the ranking yourself by including the journals that you like and excluding the ones that you despise.  No matter how the cookie is cut, our economics departments are abysmal.

Many congratulations to Kevin O’Rourke on being the first Irish-based recipient of the prestigious European Research Council Advanced Investigator Grant for a project to research the inter-relationships between trade, trade policy and the Great Depression: you can find out more details here.

I wrote previously on the potential relevance of behavioural economics to policy. The programme for the AEA conference this year reveals the extent to which academic economics is attempting to augment traditional models with insights from psychology. Recent popular books such as Nudge by Thaler and Sunstein, Animal Spirits by Shiller and Akerlof and Basic Instincts by the ESRI’s Peter Lunn have served to bring these ideas into the public sphere. Another upcoming book by Akerlof and Kranton attempts to bring the literature they have developed on Economics and Identity more squarely into economic debate (see George Akerlof’s IDEAS page for many of the papers the book is based on). The drive to make economics a more human discipline is discussed briefly here as a positive development by Angus Deaton. Deaton primarily addresses the issue of cognitive biases and there is a growing consensus that information processing limitations should be worked into economic models. However, the challenges posed by integrating constructs from areas such as neuroscience and identity theory are theoretically more fundamental and practically more difficult as they involve languages that most economists simply have never used or considered relevant to their domain. My point in posting this brief post is to encourage people interested in how economics relates to policy to begin to consider these academic influences and what they may imply in Ireland. The economic response to the current recession in Ireland relies in no way at all on any of these new literatures and our approach to training economists and finance professionals has largely remained unaltered by them. A good debate about how seriously we should take these literatures for policy is timely.

The CAO deadline is approaching here in Ireland.  Click here for an entertaining analysis of the returns to a college education in the United States (double click the graphic to enlarge it).  Another example of the power of graphical representation.

Administrative Data Seminar - 22nd February 2010

- An added dimension to Official Statistics

Seminar Programme is now available.

Venue: Dublin Castle, Erin Room, Dublin 2
Time: 13.30
Date: February 22, 2010
To Register: Email: corporate.support@cso.ie
or
Contact: Sabrina Bowen @ 021-453 5495

The Central Statistics Office has for many years now been using administrative data to broaden the range, scope and depth of analysis that it can provide to support evidence based policy making. The seminar will highlight some of the achievements to date in this domain and hopefully provide a focus for further developments. The recently published NSB strategy highlighted the need to focus on the development of administrative data holdings and to accelerate the development of a coherent “whole-system” approach to official statistics that links CSO generated statistics with administrative data holdings.

The broad objectives of the seminar are

• To promote enhanced engagement from stakeholders in the Irish Statistical System by providing concrete examples of the benefits that exploitation of administrative data and matching/linking of sources can provide;

• To inform stakeholders of current activities and the potential benefits to them (e.g. greater range of statistics, more in-depth analysis, reduced respondent burden, more timely statistics ) from these activities;

• To highlight what can be achieved when the necessary statistical infrastructure (unique identifiers, postal codes etc.) is in place right across the system.

(more…)

Brian Lenihan has released a statement about his health status: you can read it here.

There is a lengthy and wide-ranging interview with the minister on the News At One: you can listen here.

With best wishes to the Minister for a speedy recovery.

Jeffrey Sachs has an interesting new essay on the priorities for macroeconomic research: you can read it here (requires registration but it is free).

With three colleagues Seán Diffney, Seán Lyons and Laura Malaguzzi Valeri, we have recently published a series of papers on the economics of the electricity industry in Ireland. The conclusions are summarised in a Research Bulletin published today. There is also an article in today’s Irish Times.

The original papers are:

DIFFNEY, S., J. FITZ GERALD, S. LYONS and L. MALAGUZZI VALERI, 2009. “Investment in Electricity Infrastructure in a Small Isolated Market: the Case of Ireland,” Oxford Review of Economic Policy, Vol. 25, No. 3, pp. 469-487. Available here. We will release a working paper with additional results on this topic in the next few days.

MALAGUZZI VALERI, L., 2009. “Welfare and Competition Effects of Electricity Interconnection Between Great Britain and Ireland”, Energy Policy, Vol. 37, pp. 4679-4688. available here. An earlier version is available as a working paper.

The career of the late Paul Samuelson is well described in this obituary.

WIllem Buiter has had a varied career in academia and government service. Most recently, he has been a prominent economics blogger via the Maverecon site (hosted by the FT).  The Maverecon blog is now ceasing, since he has a new job as chief economist at Citi.  See the announcement here.

To get a sense of the perceived influence of economics on global thinking, it is worth looking at Foreign Policy magazine’s list of 100 most influential thinkers. An economist beats Obama to first place. Other economists who rank highly include Thaler and Sunstein at number 7, Robert Shiller at number 22, William Easterly at 39, Paul Collier at 36 and Esther Duflo at 41. Others on the list include Stiglitz, Ostrom (we claim her now!), Stern, Roubini, Sachs, Krugman, Posner, Sen, Buiter, Oster.

link here

The crisis has led to a new wave of interest in research that seeks to add financial realism to macroeconomic models: this WSJ article provides an interesting overview.

You can find the presentations and related materials at the conference page here.

Further notes and video will be posted soon.

A reader has noticed this call from the nation’s astrologers for extra public funding.

RTE reports the following comments from billionaire businessman Denis O’Brien while speaking at a Dublin Chamber of Commerce:

Mr O’Brien also said the country’s third level sector supported 250 academic economists whom he accused of ‘writing blogs, twittering and taking out ads to stop NAMA’.

He said they generally made a nuisance of themselves - which would be fine if 99% of them had not failed to predict the economic meltdown facing the country. He said the other 1% predicted doom all the time.

‘I have a sense that all these economists need to come and work for real businesses to really understand how the economy works and see the actual stress and strain of running a business… only then will they have something to contribute,’ he said.

I think we would take Mr. O’Brien’s lecturing about people having something to contribute a bit more seriously if he himself was willing to, say, contribute income tax to the Irish state.

I suppose in any case it’s futile to point out that I don’t know of a single Irish academic economist who Twitters and takes out ads in newspapers. Or that far from spending all day blogging, our time is largely taken up with teaching, research, administration and professional service such as refereeing and journal editing. Or that there’s more to economics than issuing warnings about macroeconomic meltdowns.

That said, it’s definitely true that people like me could never understand the stresses and strains associated with being a billionaire businessman who made his fortune by being awarded a mobile phone license in circumstances that ended up being investigated by a Tribunal of Inquiry. But then, not many of us could.

SSISI have a very interesting schedule for this term:  full details here.

This ESRI conference is taking place this morning.

The new Governor Patrick Honohan delivered an opening address which provides an interesting analysis of the Irish economic and fiscal situation: his speech is here.

The ESRI has also released its new quarterly forecast: here.

The conference also features a number of research papers, which can be found here.

In addition,  there was a roundtable on the Commission on Taxation Report: my contribution to that roundtable is available here.

Obstfeld and Rogoff have a new paper on this important topic.

Greg Mankiw has scooped a pre-release of next week’s announcement.