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Whatever Happened to Ireland?


  • Kelly, Morgan


Abstract While Irish GNP quadrupled between 1990 and 2007, this Celtic Tiger growth came from two distinctive, sequential booms, with export driven growth during the 1990s being followed after 2000 by a credit fuelled construction boom. Bank lending rose from 60 per cent of GNP in 1997 to 200 per cent in 2008, causing a house price bubble and a building boom where 20 per cent of GNP came from construction. The collapse of the credit bubble leaves Ireland with high unemployment, uncompetitive wages, a large government deficit, and insolvent banks. Despite the Irish government's already having committed itself to spend the equivalent of half of GNP to cover bank losses on developer loans, substantial further spending will be necessary to cover losses on other loans.

Suggested Citation

  • Kelly, Morgan, 2010. "Whatever Happened to Ireland?," CEPR Discussion Papers 7811, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:7811

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    References listed on IDEAS

    1. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "Varieties of Crises and Their Dates," Introductory Chapters,in: This Time Is Different: Eight Centuries of Financial Folly Princeton University Press.
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    3. Reinhart, Karmen & Rogoff, Kenneth, 2009. ""This time is different": panorama of eight centuries of financial crises," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 1, pages 77-114, March.
    4. Barro, Robert J, 1979. "On the Determination of the Public Debt," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 940-971, October.
    5. Alan J. Auerbach, 2008. "Federal Budget Rules: The US Experience," NBER Working Papers 14288, National Bureau of Economic Research, Inc.
    6. Patel, Urjit R. & Bhattacharya, Saugata, 2010. "Infrastructure in India: The economics of transition from public to private provision," Journal of Comparative Economics, Elsevier, vol. 38(1), pages 52-70, March.
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    Cited by:

    1. Gunes Kamber & Christoph Thoenissen, 2011. "Financial intermediation and the internationalbusiness cycle: The case of small countries with big banks," CAMA Working Papers 2011-22, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    2. Philip R. Lane, 2014. "International Financial Flows and the Irish Crisis," CESifo Forum, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 15(2), pages 14-19, April.
    3. Larry D. Wall, 2012. "Central banking for financial stability Some lessons from the recent instability in the US and euro area," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 8(3), pages 247-280, August.
    4. Krzysztof Olszewski, 2013. "The Commercial Real Estate Market, Central Bank Monitoring and Macroprudential Policy," Review of Economic Analysis, Rimini Centre for Economic Analysis, vol. 5(2), pages 213-250, December.
    5. Wall, Larry D., 2012. "Central Banking for Financial Stability: Some Lessons from the Recent Instability in the United States and Euro Area," ADBI Working Papers 379, Asian Development Bank Institute.
    6. Aidan Regan, 2014. "What Explains Ireland’s Fragile Recovery from the Crisis? The Politics of Comparative Institutional Advantage," CESifo Forum, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 15(2), pages 26-31, April.

    More about this item


    Credit bubble; Irish economy;

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe


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