Institutions in Crisis

Institutions in Crisis

European Perspectives on the Recession

New Thinking in Political Economy series

Edited by David Howden

This critical and thought-provoking book explores the causes and consequences of Europe’s failed political and economic institutions. Europe’s recession has created new challenges as market turmoil has shaken the foundations of the twin pillars of the new drive for European integration – political and monetary unions. This book critically assesses the patchwork solutions continually offered to hold the troubled unions together. Failed political policies, from the prodigious ‘Common Agricultural Policy’ to ever more common fiscal stimulus packages, are shown to have bred less than stellar results in the past, and to have devastating implications for future European growth. The contributors outline the manner through which European monetary union has subsidized and continues to exacerbate the burgeoning debt crisis. Most strikingly, the interplay between Europe’s political and economic realms is exposed as the boondoggle it is, with increasingly bureaucratic institutions plaguing the continent and endangering future potential.

Chapter 3: The Irish Economic ‘Miracle’: Celtic Tiger or Bengal Kitten?

Anthony J. Evans

Subjects: economics and finance, austrian economics, political economy, politics and public policy, political economy


Anthony J. Evans The Irish economic story is one well told – Barry (1999), Burnham (2003), De la Fuente and Vives (1997), Gray (1997), MacSharry and White (2000), Powell (2003) and Sweeney (1998) all offer admiring accounts of a remarkable transformation from one of Europe’s poorest economies to one of its most prosperous. Between 1990 and 2007 real GNP quadrupled, and GNI per capita (at PPP) overtook that of the UK. And yet the ragsto-riches story has an Act III: in 2009 Irish GNP fell by 10.7 percent,1 and compared to the 2007 peak had plunged by a huge 17 percent within two years, constituting ‘the deepest and swiftest contraction suffered by a Western economy since the Great Depression’ (Kelly, 2010). Just as economists were trumpeting the employment gains of the Irish ‘miracle,’ we have witnessed a total fall in employment of 266 000 from 2007 to 2009, with an unemployment rate that has doubled from 6.3 percent in 2008 to 13.25 percent in 2010.2 Figure 3.1 shows the massive increase in Irish GNI since 1990, overtaking the UK in 2006 but then falling back below it since 2008.3 The ‘Celtic tiger’ analogy is a curious one. It originates from a 1994 report by Morgan Stanley, and alludes to the infamous East Asian ‘tiger’ economies of the same period. The Austrian theory of the trade cycle rests on a conflict between expected future incomes and the stock of real resources required for production. According to the conventional story,  artificially...

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information