Global rankings of competitiveness are widely used, not so much by economists as by policymakers and those trying to attract foreign investment. This post compares and contrasts the WEF and World Bank measures of business competitiveness. The World Bank’s Doing Business rankings lend themselves very readily to policymakers taking action and differ for many countries quite substantially from the WEF rankings. Read more
This post examines three key assumptions underpinning the assertion that NAMA only requires a 10% rebound in property values in 10 years to ‘wash its face’. It looks at the importance of measuring the fall right, questions the yield given for NAMA’s loan book and raises the possibility of any yield correction coming through downward rent adjustment, not a rebound. Read more
This post celebrates Arthur’s Day and 250 years of Guinness with an economic perspective on our national drink, including a look at wages measured in Guinness terms and the fate of Guinness on the stock markets from its flotation in the 1880s to the end of the Roaring Twenties… and of course the magic dates when Guinness was worth 17.59 (million)! Read more
This post looks at the numbers behind NAMA in more detail, producing estimates of how much is in different segments of Irish and international property markets. It also critiques the calculation of long-term economic value, which turns out to be based on about 5% of the loan book, and presents revised estimates based on a broader sets of loans and more realistic assumptions. Read more
This post sets out the key facts about NAMA, as per the Department of Finance’s supplementary information, published on Wednesday. It goes through the amount lent, the number of deals, the loan-to-value, the estimated fall from peak so far and NAMA’s proposed ‘plateau’ level, before raising some issues to be dealt with in later posts. Read more
This post continues the regional review of house prices with an analysis of four-bedroom homes in the different suburbs of Cork. It finds that Cork bucks the trend seen generally in the country and in Dublin and Galway cities that more expensive areas have fallen hardest. The largest falls in Cork have been in Glanmire. It then explores some of the likely explanations for these different regional trends. Read more
This post reviews some initial evidence from the 250 respondents so far to the poll on expected income changes in 2009. About 60% of respondents expect their income to fall this year compared to last. A breakdown by sector and by income level shows that across five broad sectors of the economy, lower paid workers are being spared the worst income cuts. In ICT, wages are expected to be static for the typical worker, regardless of income group. Read more
This post looks at what has happened house prices in various areas across Galway city. It finds clear evidence that the more expensive areas, like Salthill and Knocknacarra, not only peaked earlier but have also fallen by more – up to 30% from the peak so far. Read more
With the global recession being just a coincidence for Ireland, whose exports have actually grown this year, what will the likely impact of any global recovery be? This post explores two sets of scenarios, a global dream/snooze/nightmare and a domestic equivalent. Given the nature of Ireland’s economy and its exporting sector, even a global dream recovery is likely to have little economic impact in Ireland. It’s the domestic consumer that will drive our next phase of growth. Read more
Evidence from tiered house price indices in the US suggests that cheaper districts have fallen by more since the boom ended. In Ireland, however, the opposite appears to be the case, as this post discusses. Asking prices for four-beds in Killiney have fallen over 35% in just over a year. Looking at four areas, two high-end (Dublin 6 and Blackrock) and two first-time-buyer (Lucan and Balbriggan) over a longer period shows again that 2009 has taken its toll on the top end much more so than more affordable areas. Read more