Macroeconomics Case Study

Irish Economy: A Model of Success?

OR

Abstract:
In 1988, The Economist described Ireland as ‘The poorest of the rich’, while comparing the island republic with its European counterparts. Barely a decade later, the magazine called it ‘Europe’s shining light’. Ireland changed the global perception about its economy when, in 1999, its per capita GDP of €23,410 surpassed that of Britain’s €22,760. Ireland also ranked ninth in per capita output, among the industrial nations, up from 22nd in 1993. Ireland’s success was largely due to the new fiscal and monetary policies which it adopted in 1987. The case study analyses the macroeconomic policy objectives of an economy like economic growth, full employment and price stability in context of Ireland’s economy. The case study also facilitates in understanding the instruments of macroeconomic policies namely fiscal and monetary polices to achieve the above objectives.

Pedagogical Objectives:

• To understand the macroeconomic policy objectives
• To analyse the instruments (Monetary and Fiscal Policy) of macroeconomics to achieve macroeconomic objectives
• To debate whether Ireland will sustain its economic success.

Keywords : Irish economy, Celtic Tiger, Ireland, Emigration, Foreign direct investments, European Economic Community (EEC), Zero corporate tax, European Exchange Rate Mechanism (ERM), European Monetary System (EMS), Golden rule, Tallaght strategy and social partnerships, National Development Plans, GDP and GNP