The Global Financial Crisis and its Budget Impacts in OECD Nations
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The Global Financial Crisis and its Budget Impacts in OECD Nations

Fiscal Responses and Future Challenges

Edited by John Wanna, Evert A. Lindquist and Jouke de Vries

The global financial crisis of 2007–09 constituted the biggest shock to the economies of the OECD nations since the Second World War and caused most of their governments to move into intense crisis mode. They made significant adjustments to their fiscal policy regimes, including massive interventions to stabilize markets and economies. But how they reacted to the crisis, and what measures they took to deal with it, still underpin their economic and budgetary positions. This singular shock provides the editors and authors of this book with an intriguing opportunity to examine how different OECD budgetary systems performed. Chapters cover the EU, North America and Asia, assessing how governments responded to the challenge and how their budget systems evolved in the aftermath.
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Chapter 11: Managing Ireland’s budgets during the rise and fall of the ‘Celtic Tiger’

Richard Boyle and Michael Mulreany


The rise and decline of the Irish economy in the 1990s and 2000s has been a dramatic roller-coaster ride. General government debt as a percentage of gross domestic product (GDP) exceeded 100 percent in the late 1980s. The government addressed this problem through economic policies to stimulate growth and by establishing the National Treasury Management Agency to manage the national debt and borrow on behalf of the Exchequer. The so-called ‘Celtic Tiger’ boom started in the late 1980s to early 1990s. From 1987 to 1993 there was a period of stabilization and recovery after the recession of the 1980s. Then there was a period of very strong economic growth from 1993 to 2000, with the average growth of GDP being 9.3 percent per year. Employment also increased rapidly, with unemployment falling from 16 percent to 4 percent, effectively full employment. Irish incomes converged rapidly with the European Union (EU) average. Support from structural funds from the EU, amounting to roughly 3 percent of GDP per annum in the early 1990s, also helped finance an expanded public infrastructural program. Ireland was seen as an exemplar nation in the EU, a model to follow for peripheral and accession countries, its virtues extolled by those promoting the benefits of economic and monetary union.

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