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The near-death experience of the celtic tiger

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  • Manfred Gärtner
  • Björn Griesbach
  • Giulia Mennillo

Abstract

This article narrates Ireland’s recent odyssey from the pride and envy of Europe to kneeling supplicant through the eyes of an econometric model of the government bond market. The exercise suggests that, in essence, two developments triggered and propelled Ireland’s drift towards sovereign default: first, the global financial crisis that drove Ireland into a severe recession with collapsing tax revenues and increasing unemployment; second, a gap between the post-2007 increase in sovereign default risk that can actually be linked to macroeconomic fundamentals and the much bigger increase in perceived risk reflected by high interest rates and communicated by the massive downgrades of Ireland’s sovereign debt rating. Copyright ZBW and Springer-Verlag Berlin Heidelberg 2013

Suggested Citation

  • Manfred Gärtner & Björn Griesbach & Giulia Mennillo, 2013. "The near-death experience of the celtic tiger," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 48(6), pages 358-365, November.
  • Handle: RePEc:spr:intere:v:48:y:2013:i:6:p:358-365
    DOI: 10.1007/s10272-013-0478-3
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    Cited by:

    1. Gaertner, Manfred, 2014. "Standards are Poor: On Competence and Professional Integrity at the Leading Rating Agency," Economics Working Paper Series 1418, University of St. Gallen, School of Economics and Political Science.

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