19th-century Markets and Fairs as Imperial Economics

Dr. Aine Sheehan will present on “Economics of Empire: Markets and Fairs in 19th-century Ireland” on Friday 5th April at the Military History Archives, Cathal Brugha Barracks.

Dr.Sheehan makes the local global to explore connections between grassroots economics at markets and fairs, local politics and the wider imperial context, to shine new light on Ireland’s place within the British Empire of the 19th century and its everyday impact on Irish producers and consumers.

The talk and screening is free but spaces are limited and should be booked in advance on Eventbrite:https://www.eventbrite.ie/e/economics-of-empire-markets-fairs-in-19th-century-ireland-tickets-59379130578

Economic and Social Review new edition

The Spring edition of the Economic and Social Review is now available here.

It is a bit of a bumper volume with special editions in both the articles section on measuring economic potential and a special policy section focusing on housing.

Articles:

Foreword to Special Edition of The Economic and Social Review by Eddie Casey.

Inside the “Upside Down”: Estimating Ireland’s Output Gap by Eddie Casey

Estimating the Output, Inflation and Unemployment Gaps in Ireland using Bayesian Model Averaging by Michael O’Grady

The Current Account, a Real-Time Signal of Economic Imbalances or 20/20 Hindsight? by Niall Conroy and Eddie Casey

Measuring the Cycle and Structural Shocks by Marta Lopresto and Garry Young

Policy Section Articles

Exploring Affordability in the Irish Housing Market by Eoin Corrigan, Daniel Foley, Kieran McQuinn, Conor O’Toole and Rachel Slaymaker

The Scale and Impact of the Local Authority Rent Subsidy by Eoin Corrigan

Social Housing in the Irish Housing Market by Dorothy Watson and Eoin Corrigan

Irish Postgraduate and Early Career Economics Workshop 2019 – Updates

This year’s Irish Postgraduate and Early Career Economics (IPECE) Workshop will be hosted by the Discipline of Economics at NUI Galway on Thursday June 6th and Friday June 7th. The event is aimed at PhD students, PostDocs, early career researchers and advanced Masters students based in higher education and research institutions on the island of Ireland. The meeting will feature the work and findings of scholars in economics and related fields, and will provide an excellent opportunity to present research results and work-in-progress in a welcoming and constructive environment. We strongly encourage those working on economics-related research to submit.

IPECE Webpage

We now have a dedicated workshop webpage: http://www.nuigalway.ie/business-public-policy-law/cairnes/subjectareas/economics/ipece2019/. Please check in for full details of the workshop and for regular updates.

IPECE Training Event – An Introduction to Machine Learning for Economists

This training event will be delivered by Dr. Achim Ahrens from the Economic and Social Research Institute (ESRI) on Thursday 6th June from 1pm to 5pm. It will provide an overview of popular Machine Learning techniques and the focus will be on LASSO regression, a regularization and model selection method that can deal with high-dimensional data. It will also discuss how the LASSO and other Machine Learning tools can be useful for economists; in particular, how Machine Learning can improve predictions and facilitate causal inference. The presentation will be followed by a demonstration using the Stata packages LASSOPACK and PDSLASSO.  

Deadline for Submission

The deadline for abstract submission is Monday April 1st. Applicants will receive notification shortly afterwards. Please note that if you wish to be considered for a discussant session, you will be expected to submit a full paper by Monday May 20th. Please see the IPECE webpage for further details.

Support

Support from the Irish Economic Association (IEA) and the Discipline of Economics at NUI Galway is gratefully acknowledged.

Miriam Hederman O’Brien Prize for 2018

The Foundation for Fiscal Studies presents the annual Miriam Hederman O’Brien Prize to recognise outstanding contributors in the area of Irish fiscal policy. The aim is to recognise those who promote the study and discussion of fiscal, economic and social policy. This forms an important part of the Foundation’s objective of promoting understanding and knowledge in these areas

Last year’s winner and shortlisted nominations are available here.

Call for Nominations

Nominations are invited for work completed during 2018 that has added to the public knowledge or understanding in areas such as taxation, public expenditure and other related fiscal policy topics. These contributions may include research papers, reports, books, book chapters, blog posts, opinion pieces, newspaper articles, television or radio contributions/documentaries or any other method which has publicly provided new and relevant insights into these topics in Ireland.

A shortlist of nominations will be compiled with the winners selected by a judging panel for the Prize. The judging panel will consist of national and international experts and is chaired by FFS Chairman.

The successful contribution will be awarded the Miriam Hederman O’Brien Prize which includes a cash prize of €1,000 and commemorative Gold Medal. The judging panel may also recognise other contributions from different categories or other types of contributions and award them appropriately.

Criteria / Eligibility

·         The Prize is for work completed during the period 1 January 2018 to 31 December 2018.

·         There are no age or nationality criteria.

·         No individual may be awarded the Prize more than once.

·         Jointly-produced work will be considered, provided that no contributor has previously been awarded the Prize.

The Nomination Process

·         The closing date for nominations is 15 May 2019.

·         Those making nominations should briefly specify (100-150 words) why they believe the work is suitable for consideration for the Prize. They should also provide a weblink or other details of the work being nominated.

·         Those making nominations may nominate more than one piece of work.

·         Those making nominations are encouraged to nominate any pieces of work they feel meet the criteria for the prize, regardless of whether or not they themselves are the author. Authors may also nominate their own work.

·         Nominations for the Prize should be made by email to info@fiscal.ie.

Report Launch: Micro-Businesses in Ireland

Wednesday April 3rd 2019

National University of Ireland, 49 Merrion Square E, Dublin 2

4:00-5:30pm

REPORT LAUNCH

‘Micro-Businesses in Ireland: From Ambition to Innovation’

Authors: Dr. Jane Bourke & Prof. Stephen Roper

Launched by Senator Pádraig Ó Céidigh

PANEL DISCUSSION

‘Supporting Micro-Business Growth in Ireland’

Chair: Prof. Stephen Roper (ERC & WBS). Panel:  Senator Padraig O’Ceidigh, Sven Spollen-Behrens (Small Firms Association), Lisa Collins (Micro-Business Owner), & Dr. Jane Bourke (UCC & ERC)

As places are limited please register here

Further information is available here 

Professor David O’Mahony, RIP

Professor David O’Mahony, former UCC Professor of Economics, passed away on March 10th.  He was Professor of Economics in UCC from 1964 to 1988.

A highly-respected scholar, his works include The Irish economy: an introductory description (1964), Ireland and the EEC: political, legal and economic aspects (1972) and The general theory of profit equilibrium: Keynes and the entrepreneur economy (1998) (with Connell Fanning). In addition, he authored several Economic Research Institute (now ESRI) papers, in particular on collective bargaining and industrial relations.     

Professor O’Mahony was widely held in great respect and affection by colleagues and students alike and will be sadly missed.

Funeral arrangements: https://rip.ie/death-notice/professor-david-o-mahony-sunday-s-well-cork/382183

DEW, September 2019 – call for papers

The 42nd DEW Annual Economic Policy Conference will take place on 13/14 September 2019 in Clayton Whites Hotel, County Wexford. DEW is Ireland’s longest standing and premier forum for economic policy debate. Founded in 1977, the annual economic policy conference is attended by policymakers, academics and practitioners with a focus on evidence-based policymaking. We are now in the process of assembling speakers for this year’s event and would like to invite a call for papers in the following areas:

  • The economics of health
  • Sustainability & climate change
  • Small open economies
  • Labour market
  • 20th Anniversary of the Euro
  • Housing

Submissions should be sent to sarah@dublineconomics.com, by Thursday 18 April. All submissions will be treated fairly but cannot be guaranteed to be accepted for inclusion in the conference.

DEW Committee

Does (airport) price regulation offer lessons for protecting the public from overcharging for public investment projects?

Here is a somewhat longer version of an Op Ed I wrote for a recent edition of the Irish Independent.

The article is based on the accompanying Table, of which the current version is drawn from last year’s Issues Paper (p.52) published by the aviation regulator’s office. The Table aims to set out, comprehensively and (crucially) ex ante, all of the different ways in which a projects costs might differ from the projected costs – some good, some not so good, some catastrophic – and the appropriate regulatory policy for each.

How are we to protect taxpayers from outrageous cost escalation on public investment projects that draw from a finite pool of taxpayer funds and thereby squeeze out other plans? There may be lessons from the approach of regulatory offices that organise their assessment of capital expenditures with a view to protecting, for example, airport passengers from costs overruns on major projects such as the second terminal (T2) at Dublin airport.

SSISI Meeting (Barrington Lecture) – 5.30pm, Thursday 21st February

SSISI logo.png

The Statistical & Social Inquiry Society of Ireland [ssisi.ie]

invites you to attend the 2019 Barrington Lecture on the following topic:

US corporate tax rate cuts: Spillovers to the Irish economy

By: Daragh Clancy (European Stability Mechanism)

to be delivered on: Thursday 21st February 2019 at 5.30pm

at the: Royal Irish Academy

The proposer of thanks is Professor Frank Barry, Trinity College Dublin.

Abstract: We examine spillovers to the Irish economy from US corporate income tax rate cuts and find they lead to a small but persistent increase in Irish output. Our analysis of the transmission channels shows that this expansion is largely driven by an increase in investment, employment and exports in the externally-financed industrial sector. We also find that spillovers from US corporate income tax cuts are larger when the Irish economy is already expanding. Our findings suggest that the changing structure of the Irish economy means any spillovers to real economic activity from the recent US corporate tax cuts could be relatively minor. However, the shifting focus of foreign multinational corporations’ operations in Ireland means that there is a risk of a capital outflow.

Non-members are welcome to attend and participate in the discussion.

Irish Economic Association Annual Conference 2019

The 33rd Annual Irish Economic Association Conference will be held in The River Lee Hotel, Western Road, Cork City on Thursday May 9th and Friday May 10th, 2019.

The keynote speakers will be Dr Asli Demiguc-Kunt, Director of Research at the World Bank, and Prof. Valentina Bosetti, Professor of Economics at Bocconi and a member of the IPCC.

The Association invites submissions of papers to be considered for the conference programme. Preference will be given to submissions that include a full paper. Papers may be on any area in Economics, Finance and Econometrics.

The deadline for submissions is Tuesday 19th of February 2019 and submissions can be made through this site.

https://iea2019.exordo.com

Irish Postgraduate and Early Career Economics Workshop 2019

This year’s Irish Postgraduate and Early Career Economics Workshop will be hosted by the Discipline of Economics at NUI Galway on Thursday June 6th and Friday June 7th. The event is aimed at PhD students, PostDocs, early career researchers and advanced Master students based in higher education and research institutions on the island of Ireland. The meeting will feature the work and findings of scholars in economics and related fields, and will provide an excellent opportunity to present research results and work-in-progress in a welcoming and constructive environment. We strongly encourage those working on economics-related research to submit.

Format
This year the workshop will include a range of thematic sessions and training events. For participants with a full paper, thematic sessions with discussants will be available i.e. after your presentation, a discussant will present a brief assessment of your paper with feedback. For participants with early-stage/emerging research findings, thematic sessions with general open discussion of your research will be available. Both will take place on Friday June 7th, along with a short training session on ‘Publishing your Research in Peer-Reviewed Journals – Tips from Journal Editors’. In addition, a workshop on ‘An Introduction to Machine Learning for Economists’ will take place on the afternoon of Thursday June 6th, followed by a social event that evening. A full schedule will be announced in due course.

Submission
As the workshop and associated training events are free to attend, no financial assistance for travel or accommodation can be provided. Researchers wishing to submit their work for consideration are advised to submit a 2-page extended abstract to IPECE2019@gmail.com. Applicants are asked to include their name, institution or affiliation, and current academic status (PhD, PostDoc, Early Career, Masters) when submitting an abstract. Please also indicate if you would like to present at a discussant session. All of the above information should be attached in a single PDF or Word File and the deadline for abstract submission is Monday April 1st. Applicants will receive notification shortly afterwards. Please note that if you wish to be considered for a discussant session, you will be expected to submit a full paper by Monday May 20th.

Contact
The local organising committee consists of Laura Carter, John Cullinan, Jason Harold, Dan Kelleher, Doris Laepple, Shikha Sharma and Michelle Queally at NUI Galway. Please direct inquiries to IPECE2019@gmail.com.

Support
Generous support from the Irish Economic Association (IEA) and the Discipline of Economics at NUI Galway is gratefully acknowledged.

Finally Someone Noticed

I have been puzzled since the withdrawal agreement terms first emerged that the UK is to be credited with no more than its subscribed capital on exit from the European Investment Bank. The EIB makes serious money, has not paid dividends and must be the most solvent bank around, This from the House of Lords Committee yesterday:

https://www.parliament.uk/business/committees/committees-a-z/lords-select/eu-financial-affairs-subcommittee/news-parliament-2017/brexit-eib-report-published/

‘The Government failed to provide a satisfactory explanation of its negotiation position on the return of the UK’s capital. As a profitable business, there seems to be a plausible case that the UK should receive some share of that profit. A 16.1 percent share of the EIB’s retained earnings would be €7.6 billion, almost 20 percent of the UK’s financial settlement of £35–39 billion.’

The UK gets just €3.5 billion. The implied price-to-book is a steal for the surviving shareholders.

2019 Monsignor Pádraig de Brún Memorial Lecture – Philip Lane

Central Bank of Ireland Governor Philip Lane will deliver the 2019 Monsignor Pádraig de Brún Memorial Lecture, entitled Climate Change and the Financial System, at NUI Galway on Tuesday, 5 February. All sectors of the economy will be affected by climate change, whether through exposure to weather-related shocks or the economy-wide transition to low-carbon means of production and consumption. These structural changes will require considerable investment by households, firms and the government to retrofit buildings and switch to low-carbon production techniques and transportation methods.

The funding of this investment is just one of the challenges facing the financial system. In addition, it must cope with carbon-related market risks and credit risks, a reduction in the insurability of climate-vulnerable regions and activities and the tail risks of macroeconomic and financial instability. Given the scope and severity of these risks, addressing climate change is now high on the policy agendas of the central banking and regulatory communities. Accordingly, this lecture will outline the climate-related work agenda facing the Central Bank of Ireland.

The biennial public lecture is held in honour of Monsignor de Brún who served as University President from 1945 until 1959. The memorial lectures have been running since the 1960’s with Professor Stephen Hawking giving a lecture in 1994 on “Life in the Universe”.

The event is free and open to the public, however those who wish to attend must pre-register at: https://www.eventbrite.ie/e/climate-change-and-the-financial-system-tickets-54910693362?aff=ebdssbdestsearch

A Short History of Brexit (Part 2: notes from Chapter 8 on)

CHAPTER 8: BREXIT

  1. Young (1999), p. 483.
  2. The speech is available at https://www.margaretthatcher.org/document/113686.
  3. Young (1999), p. 479.
  4. Grob-Fitzgibbon (2016), pp. 438–9.
  5. The speech itself, as well as a superbly useful range of accompanying documents, is available at https://www.margaretthatcher.org/archive/Bruges.asp.
  6. Young (1999), p. 423.
  7. Grob-Fitzgibbon (2016), p. 451.
  8. Grob-Fitzgibbon (2016), p. 453; https://www.nybooks.com/articles/1990/09/27/the-chequers-affair/.
  9. A reference presumably to the European Commission’s Commissioners.
  10. Cited in Seldon and Collings (2000).
  11. Young (1999), p. 362.
  12. https://www.margaretthatcher.org/document/108234.
  13. http://www.britpolitics.co.uk/speeches-sir-geoffrey-howe-resignation.
  14. http://news.bbc.co.uk/2/hi/uk_news/politics/1701003.stm.
  15. Young (1999), p. 433.
  16. I have put the word ‘victory’ in inverted commas to highlight the way in which much of the British political class and media have traditionally portrayed EU negotiations in terms of victory and defeat, rather than compromise and mutual benefit.
  17. The origins of these numbers, which seem arbitrary, are murky. On one account the 3 per cent figure is, like VAT, a gift from France to the world: see https://www.latribune.fr/opinions/tribunes/20101001trib000554871/ a-l-origine-du-deficit-a-3-du-pib-une-invention-100-francaise.html.
  18. Which is why I and 38 other Irish citizens were able to stand for election in the French municipal elections of 2014. And it should be noted that there were also 389 British candidates; see http://www.lefigaro.fr/politique/le-scan/decryptages/2014/03/19/25003-20140319ARTFIG00358-d-o-viennent-les-candidats-etrangers-aux-municipales.php.
  19. See Eichengreen and Wyplosz (1993) for a detailed account of the EMS crisis of 1992–3. Like all the Brookings Papers it is freely available online at https://www.brookings.edu/project/brookings-papers-on-economic-activity/.
  20. Young (1999), p. 369.
  21. Both statements are equally true of the Clinton years.
  22. https://www.bbc.co.uk/news/uk-politics-37550629. 23. Shipman (2017), p. 6.
  23. Kenny and Pearce (2018). 25. Ibid., pp. 131, 145.
  24. Shipman (2017), p. 7.
  25. Ibid., p. 8.
  26. Delors’s statement is available at https://core.ac.uk/display/76794060; the quotations in the text are taken from pp. 17–18.
  27.   Gstöhl (1994).
  28. Shipman (2017), p. 15.
  29. Available at http://www.consilium.europa.eu/media/21787/0216-euco-conclusions.pdf.
  30. Shipman (2017), pp. 588–9.
  31. See O’Toole (2018).
  32. See for example https://www.cbc.ca/news/world/boris-johnson-european-union-hitler-1.3583108.
  33. Although I was a member of the Centre for European Reform’s Commission on the UK and the Single Market, I declined to sign a resultant letter to the newspapers on what the UK ought to do, as well as similar subsequent efforts, for two reasons. First, I’m not British, and I know from the Irish experience how irritating it is to have foreigners telling you what to do at times like this. And second, it wasn’t at all clear to me that economists’ letters were particularly helpful. On that score at least, I think I was (unfortunately) right.
  34. The statement led to a sharp rise in the British pound and a bigger subsequent collapse, all of which helped certain lucky investors to make a lot of money (Shipman 2017, pp. 432–4).

Continue reading “A Short History of Brexit (Part 2: notes from Chapter 8 on)”

Economic and Social Review, Winter 2018

The latest edition of the Economic and Social Review is  now available (Vol 49, No 4, Winter 2018) containing the following articles:

The Impact of Displacement on the Earnings of Workers in Ireland by           Nóirín McCarthy and Peter W. Wright

Incumbency Advantage in an Electoral Contest by Matthew T. Cole,             Ivan Pastine and Tuvana Pastine

Re-Examining the Relationship Between Export Upgrading and Economic Growth: Is there a Threshold Effect? by Saafi Sami and Nouira Ridha

Policy Section Articles

Making the Worst of a Bad Situation: A Note on Irexit by Ronald B. Davies and Joseph Francois

Optimum Territorial Reforms in Local Government: An Empirical Analysis of Scale Economies in Ireland  by Gerard Turley, John McDonagh,             Stephen McNena and Arkadiusz Grzedzinski

A Contingent Valuation Analysis of the Galway City Museum: Welfare Estimates for Attendance in the Absence of an Admission Fee by               Vincent G. Munley

NTA RECOMMENDS NO FURTHER TENDERING OF DUBLIN BUS SERVICES (updated)

Under this rather stark headline, the National Transport Authority (NTA) issued a press statement on 2nd October last, giving a little under a month for responses to be received. The NTA was proposing, for reasons set out in a consultation paper  and technical report to award a further five-year monopoly to Dublin Bus.

A decision is due from the NTA Board this month (see item 8).

On its establishment, the NTA’s first act was to award an initial five-year monopoly to Dublin Bus (as well as to Bus Eireann and Irish Rail).  Five years later, which was five years ago, a second almost-complete monopoly was awarded, except that 10% of services were to be tendered for competitively. Bus users will see that these services are just now beginning to be operated by Go-Ahead in certain parts of Dublin.

Now, the NTA proposes to tender no more. Some competition-sympathising acquaintances and I have made a submission to the Authority for its consideration. Here is the executive summary; the Association referred to is a new group, the Competition Advocacy Association (of which more later):
Continue reading “NTA RECOMMENDS NO FURTHER TENDERING OF DUBLIN BUS SERVICES (updated)”

Une brève histoire du Brexit

I have just published a short history of Brexit. In the latter chapters, dealing with the Single Market, Brexit, and the subsequent negotiations, a lot of the (mainly official) sources used are freely available online. In order to make it easier for the interested reader to consult these sources, and find out more about the EU and Brexit, I am reproducing the endnotes below.

Cher lecteur, chère lectrice: veuillez trouver ci-dessous, comme promis dans mon livre, les notes de bas de page. J’espère que cela facilitera ceux et celles qui souhaitent approfondir encore davantage leur connaissances sur l’Union européenne, le Brexit et les négociations sur le Brexit. A ce jour les liens fonctionnent tous, mais si vous trouvez des erreurs faites-le moi savoir et je ferai le nécessaire.

Continue reading “Une brève histoire du Brexit”

Longfield Lecture in Economics, UCC – Oct 18th 2018, 6pm

Cork University Business School & Department of Economics

 is pleased to invite you to the

Second Annual Longfield Lecture in Economics


 Professor John Fitzgerald

Adjunct Professor of Economics, UCD and TCD

 The Phoenix and the Ashes – 60 years of Irish economic policy

 Thursday 18 October 2018

6.00pm

Venue: Kane Building, Room G02

 All are welcome


 About the speaker

Professor Fitzgerald is one of Ireland’s foremost economists. He is currently an Adjunct Professor in both TCD and UCD, having previously been a Research Professor in the Economic and Social Research Institute in Dublin. He is a member of the Central Bank of Ireland Commission and he is Chairman of the Irish government’s Climate Change Advisory Council.

 About the lecture

Instead of ushering in a period of economic success, the first 40 years of independence saw a serious underperformance by the Irish economy. Ireland missed the free trade boat after the Second World War and, unlike the rest of Northern Europe from the Urals to Snowdonia, it did not invest in human capital.

Policy began to change in the 1960s. EU membership in 1973, and a steady commitment to developing a modern education system, eventually saw Ireland realise its economic potential.

Bad mistakes in fiscal policy in the late 1970s further delayed Ireland’s convergence to an EU standard of living. However, once the fiscal crisis was dealt with and the EU Single Market came into effect in 1993 Ireland grew very rapidly so that by the mid-2000s Ireland had a standard of living above that of the EU15.

Once again unwise fiscal policy, combined with a massive failure of financial regulation, saw Ireland face a major economic crisis in 2008. However, having got into this mess, policy makers made a very good job of extricating the country from the mire. Nonetheless this process was very painful, leaving a legacy of debt and damage to individual households.

The success of the Irish economy has been built on developing an extremely open economy, a sustained policy of investing in human capital, and a very open labour market. All of this has been underpinned by the multiple advantages conferred by EU membership.

Statistical Codology

Tim Harford, in his column last Saturday in the Financial Times, laments the innumeracy which pervades the popular press and much of the political debate. There are people unable to remember the difference between a million and a billion constantly pontificating on weighty economic issues of all descriptions in both print and broadcast media. My favourite category of statistical codology is the university ranking tables now produced in profusion by various self-appointed scorekeepers, notably the Times Higher Education Supplement which ought to know better. The Irish newspapers reported last week the sad news that Trinity College Dublin had fallen from 117th best university in the whole wide world to a mere 120th according to this venerable source. It has fallen behind the University of York, the shame of it, and has managed to stay just an inch ahead of the University of Oslo (phew!).
Unreported was the even sadder news that the Cork City football team, last season’s Irish champions, are now ranked a humble 160th in the world, down from the heady heights of 157th this time last year and just a corner-kick ahead of Croatia’s Rijeka FC. This vital info can be gleaned from footballdatabase.com, who must be wondering why their number-crunching attracts so little coverage.
There is a simple reason. Football fans know that these rankings mean nothing whatsoever. If anyone really needed to know whether Cork or Rijeka boasts the better team, say if they were drawn against one another in some competition, the matter takes ninety minutes to resolve. How though do you check if Trinity or Oslo has the better university? A ninety-minute showdown between the staff of the two institutions would be quite a spectacle but could turn ugly.
The attraction of the university rankings for journalists is precisely that they are meaningless and accordingly incontrovertible. The winner in the latest league table for world’s best university was none other than the University of Oxford, whose distinguished alumni include Boris Johnson, Theresa May, David Cameron and just about all the other folks who have been doing such a spiffing job on Brexit. Which does not mean that Oxford is a poor university. It just means that the concept of university league tables is for the birds. Football league tables (based on the results of actual matches between the teams in each league) are at the upper end of respectable scientific practice by comparison. It looks like Dundalk will relieve Cork of their title as the season draws to a close. But since each team will have played 36 games against the rest this really does suggest that Dundalk have the best team.
However daft the concept and dodgy the statistical methodology, the university tables have their uses. The recent declines in the rankings for the Irish colleges have fuelled demands from their presidents for extra taxpayer cash. A few years back the same tables were showing an advance up the rankings, proof positive, according to the same people, that public spending on universities was delivering the goods and should be increased.
Brexit provides another example of the innumeracy which annoys Tim Harford. The UK’s annual and recurring net contribution to the EU budget has recently been running at about £9 billion per annum, a large number with lots of zeroes. This number, not to be confused with the once-off exit bill, has been ventilated by Brexiteers as, quite properly, a potential ongoing benefit to the Treasury of a full exit. Another figure in circulation is the population of the EU-27 which comes in around 450 million, not quite so large a number but lots of zeroes too. There have been regular assertions that the loss of the UK’s money will cause great damage to the finances of the EU-27: the political editor of the Sunday Express Camilla Tominey ventured that it would ‘bankrupt the European Union’ on a BBC programme, without challenge, a few months back. Nobody at the BBC, it would appear, has thus far bothered to divide the larger of these two big numbers by the smaller. The answer turns out to be £20 per head per annum. Total government revenue in the EU-27 is close to £4,000 billion. The UK’s £9 billion will be missed, but not noticed.
Some people are good at figures but most are not and are lost with very large numbers. Tim Harford’s solution is a call for better statistical training in schools and universities. Even at Oxford this looks a wee bit optimistic. There is however no excuse for the sloppiness about statistical matters in well-resourced media organisations. Here’s another very large number: the BBC gets about £3.5 billion per annum from the license fee, surely enough to engage the services of a statistician, or to buy everyone a pocket calculator. (courtesy the Farmers Journal).

Economic and Social Review, Autumn 2018

The latest edition of the Economic and Social Review (Volume 49, No.3) is now available, containing the following research and policy articles:

Articles

Job Insecurity and Well-being in Rich Democracies by Arne L. Kalleberg

Economic Stress and the Great Recession in Ireland: The Erosion of Social Class Advantage by Christopher T. Whelan, Brian Nolan and Bertrand Maitre

Household Formation and Tenure Choice: Did the Great Irish Housing Bust alter Consumer Behaviour? by David Byrne, David Duffy and John FitzGerald

Policy Articles

An Analysis of Taxation Supports for Private Pension Provision in Ireland by Shane Whelan and Maeve Hally

The Precarious Position of Drug Education Workers in Ireland by Clay Darcy

129th Barrington Medal, 2018/2019

The Barrington Medal is awarded annually by the Council of the Statistical and Social Inquiry Society of Ireland under the auspices of the Barrington Trust (founded in 1836 by the bequest of John Barrington). The award is intended to recognise a promising new researcher in the economic and social sciences in Ireland. The award is a silver medal and €1,000. This will be the 170th anniversary of the lecture series and the recipient will be the one 129th Barrington Lecturer.

The lecture should be based on a paper of not more than 7,500 words addressing a topic of relevance to economic or social policy and of current interest in Ireland. In treating the issue of economic or social policy,
the paper may either report the findings of a statistical research study dealing with some aspect of the problem or deal with the underlying theoretical considerations involved, or preferably combine these two
approaches. It should be written in a manner that makes it accessible to non-specialists in the area. More technical material may be included in an appendix.

The paper is published in the Journal of the Society, so it should not have been published before (nor should it be published subsequently without the prior consent of the Council of the Statistical and Social Inquiry Society of Ireland). Candidates, who at the time of their submission must be not more than 35 years of age, should at least submit a detailed abstract of approximately 1,000 words on the proposed lecture, with preference being
given to full papers. A short CV and the name of a proposer who is familiar with their work should also be submitted.

The call for entries closes on September 8th.  More information, including a list of past winners of the Medal since 1992, is available here and from secretary@ssisi.ie.

Negotiations and trust

I am reading Hugo Young’s wonderful This Blessed Plot (is it really possible that it is out of print? How could that possibly be?). He agrees that de Gaulle behaved “monstrously” in vetoing the UK application to join the EEC in 1963, but also makes a good case that Macmillan deserves a share of the blame too. Macmillan’s approach to the negotiations was “conditional and tentative, creeping in a state of high suspicion towards this moment of historic destiny”; the UK made it clear that it wanted to “unpick” the Treaty of Rome in certain ways and wasn’t “necessarily willing to accept the acquis communautaire” — although it was offering nothing in compensation for this. Macmillan went out of his way to emphasize the fact that the Commonwealth and the UK’s relationship with the US were central concerns for him, strengthening de Gaulle’s view that the UK did not really belong in the EEC. Nor did the UK show any great enthusiasm for joining that organisation, in case this might weaken its bargaining hand. All of this merely served to strengthen European suspicions about the UK, and not only in France, and made it much easier for de Gaulle to eventually veto the UK application (just as UK diplomatic ineptness had made it easier for him to veto Plan G some years previously).

The story is not irrelevant today. Imagine that the UK had said, in June or July 2016, that given the closeness of the vote it would seek the closest possible relationship with the EU. Imagine that it had said that avoiding a hard border in Ireland was a major priority, but that it also wanted to avoid the emergence of trade barriers within the UK. Imagine that it had said that, therefore, it would be seeking to remain within a UK-EU customs union, and that it would unilaterally commit to remaining fully aligned with all EU regulations regarding goods. Imagine that it had said that, self-evidently, this would require it to abide by all relevant ECJ rulings, and that it would naturally be willing to make a contribution to the EU budget (but nowhere near as big a one as at present, of course). And imagine that it had said that it would also be willing to sign up to a broader set of guarantees ensuring that it would not try to steal a competitive march on the rest of Europe by undermining labour and regulatory standards more generally.

It might have been quite difficult for the EU to reject such an offer outright, and there might even have been reasons for it to welcome it. The EU could have made it clear that under these circumstances there would not be free access to the EU market for services, and that this might have very negative implications for various manufacturers based in the UK for whom the provision of services to their clients is an important part of their business. It could have added that these difficulties might be surmountable if the UK accepted all four freedoms of the Single Market and paid more into the EU budget. The UK might have objected to these objections. But at least there might have been a basis for negotiation.

It seems as though the UK government may finally be inching towards a situation in which it finds itself proposing something very like the hypothetical offer outlined above. There are still mad aspects to what is supposedly being suggested, notably the proposal that the UK collect customs duties on behalf of a customs union of which it is not a member, and that goods destined for the internal UK market should potentially be allowed to face an entirely different set of tariffs. And yet, the UK is apparently proposing to remain harmonized with EU regulations for goods. We are slowly getting there.

But only very slowly, and only in the face of enormous domestic political resistance. The UK did not proactively propose the solution suggested above – it is being dragged there, kicking and screaming, since it is finally coming to realize that there is no sensible alternative (other than accepting not only a customs union but all four Single Market freedoms, or not leaving the EU at all). Its government has worked, not to build up trust, but to destroy it. Its ministers have made no secret of their disdain for the EU. The UK government has made it clear that it really does want to do free trade deals around the world, and that it really does want the freedom to regulate – or deregulate – as it chooses. Even if Her Majesty’s Government is forced by circumstances to sign up to something that precludes this, we know that this would be only reluctantly: it is quite obvious that the UK does not want this solution. And we also know from experience that its government is capable of signing a document one day, and denying that it means what it says the next.

And what this means is that there is no trust on the other side of the table; nor should there be. And that implies that even if this British government eventually comes to accept that it needs to sign up to full customs union membership, as well as full compliance with EU regulations as regards goods, an offer along those lines may not be acceptable to the EU. Indeed, it seems almost certain that it will not be.

But it is still worth asking what would have happened if clear minds and strategic thinking had prevailed in London in June and July 2016, and such an offer had immediately been proposed without any strings being attached. There would still have been those who, like de Gaulle in 1963, would have wanted to reject it, and they might still have gotten their way. (They might even have been right: I am not implicitly comparing them to de Gaulle, who clearly behaved badly.) But I am willing to bet that it would have been more difficult for them.

 

 

Economic and Social Review, Summer 2018

The latest edition of the Economic and Social Review (Volume 49, No.2) is now available, containing the following research and policy articles:

Articles

The Socioeconomic Determinants of Crime in Ireland from 2003-2012 by Stephen Brosnan

Householder Preferences for the Design of an Energy Efficiency Retrofit Subsidy in Ireland by Matthew Collins, Seraphim Dempsey and John Curtis

Decomposing the Drivers of Changes in Inequality during the Great Recession in Ireland using the Fields Approach by Cathal O’Donoghue, Jason Loughrey and Denisa M. Sologon

Policy papers

The Impact of Free GP Care on GP Utilisation in Ireland by Paul K. Gorecki

Lifting the Lid: the Private Financing of Motorway PPPs in Ireland by Dónal Palcic, Eoin Reeves and Anne Stafford

A gap in current policies for Irish financial stability

In a recent speech, the Deputy Governor of the Central Bank of Ireland, Sharon Donnery, floated the prospect that the CBI might impose Counter Cyclical Capital Buffers (CCyB) on Irish banks, in order to guard against an unstable credit build-up in the currently strong economic environment. She also used the speech to discuss current conditions in the Irish financial system and review the macroprudential regulation policies of the CBI.

In many ways, Irish macroprudential regulation has been exemplary, but there is a glaring defect. Stanga et alia (2017 and 2018) compare 26 countries regarding mortgage arrears, financial stability and macroprudential policies, and Ireland’s profile is remarkably poor. As Stanga et al. note, controlling mortgage arrears is a key objective of macroprudential policies, and Ireland has very poor performance by this metric.

Ireland’s intractable mortgage arrears problem stems in large part from its defective legal system regarding loan security, with extremely limited lenders’ rights to collateral repossession. This defect in turn limits the reliability of Ireland’s quite restrictive macroprudential policies. As Stanga et al. state in their international overview:

“Better institutions – which improve judicial efficiency and make it easier for banks to enforce their rights – reduce the level of mortgage defaults. We consider several proxies for institutional arrangements and compile an index of institutional quality (IQ). We find a significant and negative relationship between IQ and mortgage arrears, both before and after the onset of the financial crisis – the higher the average quality of institutions, the lower the average mortgage default ratio (Figure 3). Moreover, the effects of macroprudential policies and institutional quality on mortgage defaults are mutually reinforcing. As illustrated in Figure 4, the effect of the MPI [Macro Prudential Index] on defaults becomes stronger in countries with better institutions. This result suggests that the effect of tougher macroprudential policies (that reduce household leverage and ultimately deter defaults) is amplified in an institutional environment conducive to an efficient judicial system with better protection for lenders’ rights and better enforcement capabilities.”

In addition to making banks more cautious, the limited-repossession system in Ireland makes the CBI more stringent in its macroprudential squeeze on credit flows. The prospect of a future spike in mortgage defaults is a key concern for the CBI, along with the high average loss-give-default in such a scenario. Because of this, the CBI is correct to stamp down hard on any signs of substantial credit flow into the domestic housing market.

When it comes to tackling the underlying defect in the Irish system (the too-limited repossession rights of lenders) the CBI has taken the line that this is somebody else’s problem. The CBI harangues the government endlessly on tax and spend policies (which are also not strictly the CBI’s problems) but when it comes to addressing the big defect in the Irish system regarding repossession, the CBI is as quiet as a mouse.

Who is paying for this unusual Irish system of extremely-limited repossession rights? Nondelinquent mortgage borrowers pay for the limited-repossession system since their mortgage interest rate includes the expected cost of default, capturing both a high probability of default and a high loss given default. Households looking for mortgages suffer in two ways: one, the Irish limited-repossession system makes mortgages more difficult to obtain; two, the system has a knock-on effect on housing construction: property development is a high-risk business and with no guarantee of mortgage-ready buyers, developers are extra-cautious.

The net effect of the Irish limited-repossession system on housing prices is indeterminate since there are opposite effects on the demand and supply sides. Cash buyers might benefit or lose on a net basis: they lose from the decrease in house construction (hence higher prices) but benefit from reduced bidding competition against mortgage-based buyers. Existing mortgage holders (other than defaulters) lose, and prospective mortgage holders lose twice over.

At the conclusion of her speech Donnery states:

“While there are uncertainties placing a precise value on the short-term benefits and costs, in the longer-term, increasing the margins of safety in an uncertain world is of benefit to all.”

Consider a young Irish household wishing to buy a family home using mortgage finance. In exchange for a mortgage loan, they might be willing to take a chance that they lose the house in some future scenarios if things turned out badly and they could not pay the loan back. They want a house now and are willing to take a chance on the future. Such a mortgage contract is not legally available to them in Ireland nowadays, since repossession can only be enforced in ridiculously limited circumstances and, due to this legal reality, banks are not allowed to issue mortgage loans unless they are virtually default-risk-free. The young household will have to rent or live with parents, for many years into their future.

The Irish financial system, where there is virtually no chance of receiving a default-risky mortgage and even less chance that such a loan could end with repossession, is not of benefit to all. For many people in many circumstances, risk is good.

Conniffe and Norvartis Prizes

The annual conference of the Irish Economic Association was held on the 10th and 11th of May at the Central Bank. More than 160 people attended the conference.

Alejandra Ramos (TCD) was awarded the Conniffe Prize for best paper by a young economist at the conference. Alejandra received the prize for her paper titled “Household Decision Making with Violence: Implications for Transfer Programs”.

Benjamin Elsner (UCD) and Florin Wozny (IZA) won the Novartis prize for the best paper in Health Economics at the conference. The winning paper was titled ” The human capital cost of radiation: Long run evidence from exposure outside the womb”

Prof Wendy Carlin (UCL) and CORE gave the ESR lecture “The Econ 101 paradigm is broken – what is the alternative?” Her slides from the talk

IEA Dublin ESR Guest Lecture 2018

Prof Olivier Blanchard (Peterson Institute) gave the Edgeworth lecture “Should we reject the natural rate hypothesis” His slides from the talk

Edgeworth Lecture IEA 2018

On the IEA website there are plenty of pictures from the conference

http://www.iea.ie/category/latest-news/

Gerard O’Reilly

Central Bank of Ireland: Financial Stability Notes

The Central Bank of Ireland has today published its first Financial Stability Note. This new series will cover financial stability related topics including those relating to risks and vulnerabilities facing the Irish and European financial system.

 

The Note, ‘Macroprudential Measures and Irish Mortgage Lending: An Overview of 2017’, by Christina Kinghan, Paul Lyons and Elena Mazza, provides an overview of new residential mortgage lending in Ireland in 2017. It describes key loan and borrower characteristics of loans subject to the Central Bank’s Mortgage Measures along with a comparison to lending in 2016. The Note also provides details on loans with an allowance to exceed the loan-to-value (LTV) and loan-to-income (LTI) limits, as permitted under the Measures. 35, 472 new loans are examined, with a value of €7.4 billion.

 

The key findings of today’s Financial Stability Note are:

 

  • First-time-buyers (FTBs) in 2017 had an average LTV of 79.8% and an average LTI of 3 times gross income. This represents a marginal increase on the average LTV and LTI ratios reported in 2016. FTBs also had a larger loan size, property value and income compared to FTBs one year earlier (see Table 4).
  • The average loan size and property value of second and subsequent buyers (SSBs) also increased compared to 2016. The average LTV for SSBs in 2017 was 67.6% and the average LTI was 2.6 times gross income (see Table 5).
  • A higher proportion of loans for both FTBs and SSBs were originated on a fixed interest rate compared with one year earlier.
  • 17% of the aggregate value of SSB lending exceeded the SSB LTV limit.
  • 18% of new primary dwelling home (PDH) lending exceeded the 3.5 LTI cap. This corresponds to 25% of the value of FTB lending and 10% of the value of SSB lending. A larger share of LTI allowances was accounted for by FTBs (74%) relative to SSBs (26%).
  • Allowances to exceed the LTI and LTV caps were allocated to borrowers in all four quarters of 2017 (see Table 7).

Irish Postgraduate and Early Career Economics Workshop

See below for the programme for the return of the Irish postgraduate and early career economics workshop (previously “ISNE conference”). All are welcome to attend. Thanks to School of Economics in UCD for providing financial support.

Irish Postgraduate Early Career Economics Conference

UCD Geary Institute

Friday May 4th

9am to 915am: Opening Remarks: Professor Liam Delaney (UCD), Dr. Lisa Ryan (UCD), Dr. Ben Elsner (UCD), Dr. Michelle Queally

Session 1a: 915am to 1045am Session 1b: 915am to 1045am
Sanghamatira Mukrhrejee (UCD) “Factors influencing early electric vehicle adoption in Ireland”. Aine Doran (QUB) “Population Dynamics in 19th century Ireland”.
Bryan Coyne (TCD) “The impact of a subsidised weatherisation scheme on Irish domestic energy consumption”. Gayana Vardanyan (TCD) “The long-run impact of historical shocks on the decision to migrate: evidence from the Irish Famine”.
Martin Murphy (ESRI) “Predicting farm’s non-compliance with regulations on emissions of nitrates”. Man Wing (Lorraine) Wong (UCD) “The effect of language proximity on the labour market outcomes of the asylum population in Switzerland”.
10.45am  to 11am Coffee
Session 2a: 11am to 1230pm Session 2b: 11am to 1230pm
Florian Gerth (CBOI) “Entry and Exit Dynamics of UK firms in the wake of the Global Financial Crisis”.

Patrick McHale, BA  (NUIG) & Thomas Plunkett, B.Pharm (NUIG) “Healthy Eating Meal Plan Preferences Amongst a University Population: A DCE Approach”

Tammana Adhikari (UCD) “Deals versus Rules?”. Kenneth Devine (UCD) “Mortgage Choice and Expectations”.
David Jordan (QUB) “Doomed to decline?: Interwar industrial performance and policy in Northern Ireland”. Ivan Petrov (UCD) “Information Asymmetry, Split Incentives, and Energy Efficiency in the Residential Rental Market”.
1245pm to 130pm Lunch
Session 3a: 130pm to 3pm Session 3b: 130pm to 3pm
Dora Tuda (TCD) “Does higher unemployment increase income inequality: evidence from European labour markets using a discrete choice experiment”. Iordanis Parikoglou (UCD/Teagasc). “The impact of innovation on farm level productivity: evidence from the Irish dairy sector”.
TBC Stefano Ceolotto (TCD). “The impact of moral licensing on pro-environmental behaviours”.
Philip Carthy (ESRI) “Is employment growth affected by the introduction of broadband services?: Evidence from Ireland”. Linda Mastrandrea (UCD) “Linking retail pricing policy with the decarbonisation of the electricity sector”.
Coffee 3pm to 315pm
Session 4a: 315pm to 445pm Session 4b: 3pm to 445pm
Deirdre Coy (UCD) “Health formation in an RCT Early Childhood Visiting Programme”. Eoin Corrigan (UCD) “Capricious Redistribution: The Scale and Impacts of the Local Authority Rent Subsidy”.
Anne Devlin (QUB) “Why is work-limiting disability in Northern Ireland so high?”. Stephen Byrne (CBOI) “Solving the wage puzzle: Does the ‘nonemployment rate’ explain wage dynamics?”.