Together with the state and markets, community is the sometimes-overlooked ‘third pillar’ on which our society rests. Just as we need a strong state and can benefit from efficient markets, these imperatives must be balanced with the interests of the geographic communities that bind us. This is the premise of an important new book by Raghuram Rajan, former IMF Chief Economist.
In Ireland, public policy in recent decades has tended towards letting the market rip. To reduce the resulting stark income inequalities, the state has to do more heavy lifting in terms of redistribution than in any other OECD country. Even then, we only rank towards the middle of the equality league table.
Ironically, perhaps, for a country with such a strong traditional sense of community, local government is an area where we are weak. Ireland has one of the most centralized systems of governance, our local representatives lacking much in the way of real power. Whether it is rural heartlands losing pubs, post offices and people, or pockets of urban disadvantage ravaged by unemployment and drug barons’ turf wars, our communities suffer the consequences, fraying the very fabric of our society. Continue reading
THE IRISH ECONOMY continued to create jobs at a rate of more than 1,000 per week in the three months immediately following June’s shock Brexit vote, defying some of the most pessimistic predictions about the short-term impact.
According to Tuesday’s figures from the Central Statistics Office, 57,500 jobs were created this year to the end of September, signalling robust annual job growth of 2.9%.
The pace of job growth moderated slightly to a seasonally adjusted 13,500 during the most recent three month period, down from 18,900 and 16,100 in each of the first two quarters of the year, respectively. This brought the total number employed to 2,040,500, the highest since the end of 2008, although still 6% below the all-time high of 2,169,600, reached in Q3 2007.
*** This article was first published on thejournal.ie on 23 November, 2016 *** Continue reading
Nearly three years after losing access to the sovereign bond market, Ireland appears to have built sufficient momentum to escape the troika’s orbit. Come early 2014, the country will no longer be subject to its quarterly visits and binding targets. The government will have succeeded in its number one political objective: ‘regaining our economic sovereignty’. But, what will really change?
When Ireland was first bailed out, I and many others thought it unlikely that the country could succeed in regaining market access by end-2013. In mid-2011, with interest rates on Irish government bonds soaring into double digits, such a benign scenario looked ever more remote.
Then, things changed. Increasingly, Ireland came to be seen as a special case, different from the struggling ‘Club Med’ countries. Irish bond yields fell dramatically, decoupling from those of Greece and Portugal. New ECB President Mario Draghi signalled that he was willing to do ‘whatever it takes’ save the Euro. Ben Bernanke, his American counterpart, kept the printing presses running, doubling down on his so-called ‘quantitative easing’ experiment. No doubt, this ‘easy money’ helped Ireland’s cause. High profile financiers made multi-billion euro bets on Ireland’s recovery story, and are already sitting on massive paper profits. The Irish banks also got in on the act, racking up significant holdings of Irish bonds rather than lending to businesses or households. Internally, economic pain may be manifest, but externally the mood music has been mostly positive. Continue reading
I have written in the past about Ireland’s deepening investment crisis. Last week’s CSO figures for Q1 2013 showed that investment had fallen 20% compared to the same quarter in 2012 while the investment rate had fallen to 9.7% of GDP. Here is a paper I wrote on the subject, recently published by the Nevin Economic Research Institute.
In short, a national investment bank focused on infrastructure and SME financing has never been more necessary.
Wishing a merry Christmas and prosperous 2013 to all my readers !!
Well, it’s been a busy month… between graduating from Columbia, visiting Ireland, holidaying in Spain, moving to Indonesia, and starting work with the World Bank.
That largely explains my lack of blog activity of late, something I hope to rectify in the coming days and weeks.
Meanwhile, I’m settling into life in Jakarta, a sprawling, bustling, booming metropolis that epitomizes ‘up by the bootstraps’ development in emerging Asia. The fourth most populated country in the world, Indonesia has been Asia’s sleeping giant, but partly driven by a commodities boom, it is rapidly rising to take its place beside China and India.
At the World Bank, I am working on two projects: one on the impact of FDI in the services sector on economic productivity, and the other on trade logistics, notably issues relating to Jakarta’s port facilities. At a time when much of the developed world is mired in economic stagnation, it is fascinating to be exposed to economic policy issues in a rapidly rising emerging nation.
It’s not just the warm winter or early spring – the global economy really is looking brighter now than in the dark days of November.
US growth has been accelerating, unemployment falling, and Obama’s re-election chances improving. The EU appears to have gotten a handle on its debt crisis, for now, and a spiral from Recession to Depression has been averted. Continue reading
This is a paper I wrote in December 2011 for a course in Global Economic Governance, taught be Kemal Dervis and José Antonio Ocampo.
At a global level, the G-20 has tasked the Financial Stability Board (FSB), successor to the Financial Stability Forum (FSF), with pursuing a macro-prudential mandate in close cooperation with the IMF. The EU established in early 2011 a European Systemic Risk Board (ESRB) to pursue a similar mandate at EU level, while the UK is creating a Financial Policy Committee (FPC), on a par with the Monetary Policy Committee, at the Bank of England.
In this paper, I compare and contrast their mandates, capacities, modus operandii, impact to date and perspectives for the future.