ESRI QEC Research Notes

Last week the latest ESRI Quarterly Economic Commentary was published. It includes 5 research notes including one by myself on the regional dimension of the unemployment crisis.

While there is a lot of discussion about unemployment, the differences across regions have not received much attention. The note shows that the differences are significant. It also shows that things would look a lot worse if it had not been for a drop in labour force participation – in the Border region the unemployment rate could have reached 27%. Not surprisingly a sharp drop in employment is the major cause of the increase in unemployment, but a look at the sectoral breakdown of employment changes gives some interesting results. Firstly, construction employment appears to have contracted quite uniformly across the country. Secondly, employment in education and health actually grew. Thirdly, there are some interesting differences across the regions with respect to other sectors. For example, manufacturing declined much more in Dublin than elsewhere. Most importantly the analysis suggests that the underlying factors that are responsible for the differences in unemployment rates across the regions are very persistent but were hidden during the boom. You can expect some more analysis on this in the near future.

The other notes are:
Tax and Taxable Capacity: Ireland in Comparative Perspective
Comparing Public and Private Sector Pay in Ireland: Size Matters
Trends in Consumption since the Crisis
Revisions to Population, Migration and the Labour Force, 2007-2011

(re)Designing a European Banking System

Just following up on Philip’s earlier post, contrast this (gated) piece from the FT’s Wolfgang Munchau:

The resolution system likely to emerge later this year is also flawed. It will end up protecting only the taxpayer of the creditor countries from bank failures in the debtor countries. But it will not accelerate the resolution of the eurozone’s undercapitalised banks. My suspicion is that the ultimate intent of the Franco-German legislation is to secure the position of their national champion banks.

with this report on redesigning Europe’s banking system, just out from Re-Define, a think tank. Munchau highlights the national political need for renationalisation of finance, which the Re-Define paper argues exactly against this approach.

Bloomberg: German Push to Accelerate Bank Bail-Ins Joined by Dutch

This article on the bailing in of senior bondholders (HT Eurointelligence) has the remarkable sentence:

Senior bank-creditor writedowns in the EU have been rare during the financial crisis, with Ireland refusing to take the step even as it was forced in 2010 to seek an international bailout.

There is also an interesting letter in today’s FT from the Commission’s Jonathan Faull in response to last week’s op-ed by Sinn and Hau – it is here.

Whitaker Lecture: Design Flaws of the Euro

Harold James delivered the Central Bank’s Whitaker Lecture last night – text is here.

On the 70th birthday of the Central Bank, Patrick Honohan opened the event – text is here.

Boosting Competitiveness to Grow Out of Debt—Can Ireland Find a Way Back to Its Future?

New IMF WP here.