Boosting Competitiveness to Grow Out of Debt; Can Ireland Find a Way Back to Its Future?
This paper investigates the prospects for Ireland to grow its economy against the backdrop of high indebtedness. The paper uses vector autoregressive analysis to explore the interlinkages among competitiveness, exports, economic growth, and fiscal performance. The emerging conclusion is that Ireland, which has regained cost competitiveness following the crisis-driven fall in domestic prices, is poised to return to its path of strong exports and economic growth and lower imbalances provided that it maintains competitiveness, though a pickup in external demand is critical. Three main findings underpin this conclusion. First, external demand is an important driver of exports and also the single most important determinant of Irelandâ€™s GDP and government revenue. Second, declines in price competitiveness, featured by real effective exchange rate (REER) appreciations, restrain exports and economic growth. Third, exports boost output, which in turn enhances fiscal performance.
|Date of creation:||01 Feb 2013|
|Contact details of provider:|| Postal: International Monetary Fund, Washington, DC USA|
Phone: (202) 623-7000
Fax: (202) 623-4661
Web page: http://www.imf.org/external/pubind.htm
More information through EDIRC
|Order Information:||Web: http://www.imf.org/external/pubs/pubs/ord_info.htm|
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.:
- Daniela Federici & Daniela Marconi, 2001. "On exports and economic growth: the case of Italy," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 11(3), pages 323-340.
- Birmingham, Colin & Conefrey, Thomas, 2011.
"The Irish Macroeconomic Response to an External Shock with an Application to Stress Testing,"
Research Technical Papers
10/RT/11, Central Bank of Ireland.
- Bermingham, Colin & Conefrey, Thomas, 2014. "The Irish macroeconomic response to an external shock with an application to stress testing," Journal of Policy Modeling, Elsevier, vol. 36(3), pages 454-470.
- Daniel S Kanda, 2008. "Spillovers to Ireland," IMF Working Papers 08/2, .
- Reinhart, Carmen M. & Rogoff, Kenneth, 2010.
"Growth in a Time of Debt,"
CEPR Discussion Papers
7661, C.E.P.R. Discussion Papers.
- Jaejoon Woo & Manmohan S. Kumar, 2010. "Public Debt and Growth," IMF Working Papers 10/174, .
- Stephen Cecchetti & Madhusudan Mohanty & Fabrizio Zampolli, 2011. "The real effects of debt," BIS Working Papers 352, Bank for International Settlements.
- Iacovone, Leonardo & Zavacka, Veronika, 2009. "Banking crises and exports : lessons from the past," Policy Research Working Paper Series 5016, The World Bank.
- Everett, Mary, 2006. "Foreign Direct Investment - An Analysis of its Significance," Quarterly Bulletin Articles, Central Bank of Ireland, pages 93-112, October.
When requesting a correction, please mention this item's handle: RePEc:imf:imfwpa:13/35. 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: (Jim Beardow)or (Hassan Zaidi)
If references are entirely missing, you can add them using this form.