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Economic Adjustment Within EMU - Ireland’s Experience

Author

Listed:
  • Conall MacCoille

    (The Economic and Social Research Institute, Dublin)

  • Daniel McCoy

    (The Economic and Social Research Institute, Dublin)

Abstract

This paper examines the contribution of Balassa-Samuelson (B-S) type effects to inflationary pressures in Ireland. Irish productivity measures are exaggerated by foreign multinationals engaged in high value-added activities. These measures suggest that high productivity in the traded sectors explain most of the inflation differential. Using adjusted measures to account for the multinational effect, shorter-term demand side factors become more significant in explaining the inflation differential. Domestic fiscal and incomes policies are therefore an important source of adjustment for the Irish economy within a monetary union.

Suggested Citation

  • Conall MacCoille & Daniel McCoy, 2002. "Economic Adjustment Within EMU - Ireland’s Experience," The Economic and Social Review, Economic and Social Studies, vol. 33(2), pages 179-193.
    • Handle: RePEc:eso:journl:v:33:y:2002:i:2:p:179-193
    as

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    File URL: http://www.esr.ie/Vol33_2McCoille.pdf
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    References listed on IDEAS

    as
    1. Baker, Terence J. & FitzGerald, John & Honohan, Patrick, 1996. "Economic Implications for Ireland of EMU," Research Series, Economic and Social Research Institute (ESRI), number PRS28.
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    8. International Monetary Fund, 1999. "Ireland: Staff Report for the 1999 Article IV Consultation," IMF Staff Country Reports 1999/087, International Monetary Fund.
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    Cited by:

    1. Karl Whelan, 2019. "The Euro at 20: Successes, Problems, Progress and Threats," The Economic and Social Review, Economic and Social Studies, vol. 50(4), pages 725-750.
    2. Dermot Hodson, 2003. "The Exchange Rate as an Adjustment Mechanism - A Structural VAR Approach to the Case of Ireland," The Economic and Social Review, Economic and Social Studies, vol. 34(2), pages 151-172.

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