The Bord Snip Nua report came out this afternoon, recommending €5.3bn in expenditure cuts. A closer look at the figures reveals that while Health is just about paying its way, Education’s contribution to the cuts falls well short of its relative size. Meanwhile, smaller departments such as Arts, Sports & Tourism and Community, Rural & Gaeltacht Affairs are seeing cuts of up to 40%. Read more
To an economist, “inferior goods” are those we switch away from as we become richer. Between 2000 and 2008, Europeans became 14% richer, while the typical European government increased its share in the economy from 44.7% to 45.4%. The two fastest growing economies, however, the Slovak Republic and Ireland, had exactly opposite experiences, with the Slovak government now the smallest in Europe. It turns out that these countries aside, poorer countries generally saw their governments grow, while wealthier European states saw their governments shrink. Read more
New data from the CSO show in starkest terms the pay gap between public and private sectors. The evidence is now overwhelming that public sector workers enjoy a massive salary premium, which given the state of the country’s finances can no longer be afforded. Read more
Long-run data on inequality within and across countries from the 1820s allow a Rawlsian look at the world: how well off are the poorest in society? This post calculates GDP per capita of the poorest 10% of a society for a selection of world regions. This perspective makes Africa’s plight even more baffling, given that its poorest citizens were better off than those of any other developing region up to 1914. Its poorest citizens now are no better off than its poorest citizens then. Read more
The latest daft.ie House Price report was released this morning. It shows that asking prices have fallen 5.7% in the last three months and by almost one quarter since their 2007 peak. New figures on time-on-market are showing a growing gap between urban and rural markets, with properties in Dublin in particular falling more and moving faster and in greater numbers. Read more
The Irish government will spend €64bn this year, having raised barely half that amount in taxes. Realistically, public expenditure needs to be cut by about €15bn. The bulk of current expenditure is in Social Affairs, Health and Education. This post outlines how, even without major reforms, better use of taxpayers money could save €6bn across these three areas. Read more
Simple economic models often beat complicated ones. Figures from the last 25 years show a very strong relationship between the change in the unemployment rate and the change in house prices. This gives hope for those anticipating house prices to level off in late 2010 or 2011 – assuming oversupply has been priced in by then. Read more
A newly available dataset on education levels around the world from 1870 to 2010 has allowed economists to test fundamental hypotheses about economic development. This has led to fascinating insights about what causes inequality, population growth and democracy: in each case, education has played a key role. This is an optimistic message as education – unlike for example geography – can be influenced by policy choices. Read more
The latest export figures for Ireland show an increase over a year ago, a feat unique in the EU and the OECD. These only serve to reinforce the local, rather than global, circumstances of Ireland’s recession. If Ireland truly were a victim of collapsing global demand, the GDP fall this year would be closer to 20%. Read more
The volume of transactions may be a good indicator of how overheated a property market is. Figures on completions, housing stock and mortgage approvals allow an estimate of the number of transactions by county. The figures for 2005-2008 show a set of counties – including Laois and a mid-west corridor – where almost 30% of properties were traded in that period. Sure enough, these figures correlate very highly with the percentage of properties currently for sale in each county. Read more