Quantifying Revenue Windfalls from the Irish Housing Market
The speed and severity of the decline in the Irish fiscal position in recent years raises a number of important issues regarding the assessment of fiscal policy within the EU. From a position of relative strength, with large surpluses and a low debt to GDP ratio, the Irish public finances have rapidly deteriorated, culminating in an Excessive Deficit Procedure being launched in early 2009. In hindsight, it is evident that tax revenues were on an unsustainable path in recent years due, in large part, to structural imbalances within the economy, mainly associated with the housing market. The excess growth in the latter culminated in large and transitory tax revenue windfalls, which ultimately proved unsustainable. These windfalls contributed to large general government and cyclically adjusted budget surpluses. This paper seeks to quantify the windfall gains associated with property taxes through modelling housing related tax receipts over the period 2002 to 2009. From this, estimates are derived as to the underlying or property adjusted fiscal position, which is found in various years, to have diverged greatly from actual outturns.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Isabelle Joumard & Christophe André, 2008. "Revenue Buoyancy and its Fiscal Policy Implications," OECD Economics Department Working Papers 598, OECD Publishing.
- McQuinn, Kieran & O' Reilly, Gerard, 2007. "A Model of Cross-Country House Prices (228.91 KB PDF)," Research Technical Papers 5/RT/07, Central Bank of Ireland.
- Muellbauer, J & Murphy, A, 1996.
"Booms and Busts in the UK Housing Market,"
125, Economics Group, Nuffield College, University of Oxford.
- Byron F. Lutz, 2008. "The connection between house price appreciation and property tax revenues," Finance and Economics Discussion Series 2008-48, Board of Governors of the Federal Reserve System (U.S.).
- Addison-Smyth, Diarmaid & McQuinn, Kieran & O'Reilly, Gerard, 2009.
"Modelling Credit in the Irish Mortgage Market,"
The Economic and Social Review,
Economic and Social Studies, vol. 40(4), pages 371-392.
- McQuinn, Kieran & O'Reilly, Gerard, 2006. "Assessing the Role of Income and Interest Rates in Determining House Prices," Research Technical Papers 15/RT/06, Central Bank of Ireland.
- Trevor Fitzpatrick & Kieran Mcquinn, 2007.
"House Prices And Mortgage Credit: Empirical Evidence For Ireland,"
University of Manchester, vol. 75(1), pages 82-103, 01.
- Fitzpatrick, Trevor & McQuinn, Kieran, 2004. "House Prices and Mortgage Credit: Empirical Evidence for Ireland," Research Technical Papers 5/RT/04, Central Bank of Ireland.
- Stock, James H & Watson, Mark W, 1993.
"A Simple Estimator of Cointegrating Vectors in Higher Order Integrated Systems,"
Econometric Society, vol. 61(4), pages 783-820, July.
- Tom Doan, . "SWDOLS: RATS procedure to estimate cointegrating vectors using dynamic OLS," Statistical Software Components RTS00207, Boston College Department of Economics.
- James H. Stock & Mark W. Watson, 1991. "A simple estimator of cointegrating vectors in higher order integrated systems," Working Paper Series, Macroeconomic Issues 91-3, Federal Reserve Bank of Chicago.
- Lutz, Byron F., 2008. "The Connection Between House Price Appreciation and Property Tax Revenues," National Tax Journal, National Tax Association, vol. 61(3), pages 555-72, September.
When requesting a correction, please mention this item's handle: RePEc:eso:journl:v:41:y:2010:i:2:p:201-233. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Martina Lawless)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.