The Irish Economy

ESRI is looking to recruit 2 senior research economists in macroeconomics
The ESRI is seeking to expand its existing research capabilities in the following areas; housing, public finances and general macroeconomics. Accordingly, the Institute is looking to hire two senior research economists with proven track records in applied, econometric research in any or all of these areas. The appointments may be tenure track positions or on a secondment basis. The roles will involve contributing and leading research programmes in housing, public finances and general macroeconomics and the successful candidates will be expected to produce relevant high-quality research papers which can be published in both international peer-reviewed journals and domestically-oriented policy papers.
More information can be found here:
For any queries concerning the position, e-mail: kieran.mcquinn@esri.ie

There’s a lot of wrong-headed analysis doing the rounds on the implications of the proposals of the new US Administration for Ireland.  Will US companies “be enticed home” by a dramatic cut in the US corporate tax rate? Companies don’t primarily come to Europe for tax reasons. They come for market access. Ireland captures a disproportionate share of these inflows, to a large extent because our rate is low RELATIVE TO OTHER European rates. In fact, given the US tax-credit system, US MNCs in Europe would not be able to recoup upon repatriating their profits the difference between high European rates and a potential new low US rate; this would work in Ireland’s favour (to the disadvantage of high-rate European economies).

Lower rates outside the US encourage US MNCs to keep their profits offshore (though a huge proportion of these can actually be, and are, held in US bonds and banks). If fewer profits are held offshore this WILL reduce overseas RE-investments, as these are currently financed out of offshore profits.

A dramatic reduction in the US rate would reduce the inventive for re-domiciling, though, as John FitzGerald and Mary Everett (of the Central Bank) have both shown, re-domiciling into Ireland probably does us more harm than good. In any case large, rich, central (as opposed to peripheral) economies tend to have higher corporate tax rates for revenue-maximising reasons.

US protectionism would trigger retaliation which would in turn trigger vastly more tariff-jumping FDI into Europe and elsewhere. Nor would a retreat of US corporations to the US mean that their external sales would be replaced by US exports; a substantial proportion would be captured by foreign competitor companies. And a huge proportion of current US exports go as inputs to their own subsidiaries abroad. The US State Department would also not be happy with a reduction in US FDI: think of the “soft power” this overseas investment grants the US. So the proposed very low US rate is unlikely to be in America’s interests. This might well impact on the chances of getting the proposals through Congress, even if President-elect Trump decides to run with them.