Category: Uncategorized

Irish Times Series on the Jobs Crisis

The Irish Times begins a week-long series today on Ireland’s jobs crisis.   First up is a wide-ranging article by John Martin, Director for Employment, Labour and Social Policies at the OECD.  The other contributors will be Philip O’Connell (ALMPs), Liam Delaney (training polices), Brian Nolan (welfare system-employment interactions), with a concluding article on Friday by Dan O’Brien.   There is also an editorial today that criticises the government’s lack of attention to employment-related policies. 

High unemployment levels are causing growing hardship to families and individuals, requiring extensive State borrowing to fund social welfare payments and causing long-term damage to the very fabric of society. In these circumstances, schemes for retraining and job creation should top the political agenda.

But the Government appears transfixed by the banking crisis and the need to reassure bond markets.

This blog has also come in for (mostly justified) criticism in giving too little attention to the unemployment problem.  A partial defence is that effectively dealing with the banking and fiscal crises is very much part of the policy response to the recession to limit its human cost.  Hopefully, the series will spur debate on more direct policies to limit the rise in unemployment. 

Review of the ESRI

The results of the review of the ESRI are here.

Successful Bond Auction

Details here.

Cormac O Grada awarded RIA Gold Medal

Congratulations to Cormac O Grada who has been awarded 2010 Royal Irish Academy Gold Medal.  This is the premier Irish academic award and in Cormac’s case it is richly deserved.

PS: I released this yesterday but then quickly withdrew it as I thought it was embargoed!  But I think its OK to release the news now – just tell one person at a time!

What do markets want?

I have posted links to this piece in the comments section before, but never on the front page. This seems like a good time to do so, given that the question of what markets want is beginning to exercise people (see for example here, or here). The essential point is that markets understand that governments face political constraints, and take this into account when assessing the credibility of their economic policies. (And, moreover, market participants tend not to believe in tooth fairies or negative fiscal multipliers.)

We’ve known all along that fiscal adjustment here would be contractionary, and that our economy thus needed substantial export growth if it was to avoid falling into the hands of the IMF. That in turn requires a buoyant European economy; hence my alarm regarding austerity measures in countries like the UK and Germany. One of the key insights of Barry Eichengreen’s work is that you have to analyse international monetary arrangements as systems: it makes little sense to analyse policies in one country at a time as if countries are isolated from each other. Ireland has no choice right now concerning what policies to pursue, but other countries do, and if those with fiscal space (as measured by the interest rates at which they can borrow) choose to embark on contractionary policies now, for what appear to be nothing more than ideological reasons, then that is profoundly irresponsible from the point of view of the fragile system that is the European economy.