Ronan Lyons | Personal Website
Ronan Lyons | Personal Website

World Economy

Are you right there, Michael? Knowing when no deal is better than a bad deal

There is an increasing amount of talk that Ireland’s new government is prepared to do a deal with its EU partners, exchanging some of the country’s sovereignty in relation to corporate tax in return for a marginally lower interest rate on a portion of Ireland’s debt. This post discusses not only the hypocrisy and economic illiteracy on the part of Ireland’s EU partners as they push for such a move but also the costs to the Irish economy if it happened. Even leaving aside corporate tax revenues, the lost jobs, income and tax receipts make this a terrible deal for Ireland Inc. Read more

Home thoughts to abroad: Three things the Irish election has made clear

Last week, Ireland had its most momentous election since 1932, when the Fianna Fail party that would dominate politics for 80 years was born. Aside from the politics, there are clear messages in the election. This post reviews, primarily for a non-Irish audience, two messages relating to Ireland’s debt burden – that voters do not want sovereign default but do not regard bank debt in that category – as well as the real underlying issues behind the voters’ choices. Read more

Is Africa the new Asia?

Since 2000, China and India have replaced the OECD as the engine of global economic growth. This post, however, discusses an even more exciting picture that may be going on under the radar. Growth in sub-Saharan Africa has more than doubled to 6%, while population growth is slowing. With the region now home to one third of the world’s fastest growing economies, it might be time for the narrative of Africa’s growth to change. Read more

The Irish Bank Sandwich: Time for the EU to face up to reality

This post looks at the case for allowing the international bondholders of Irish banks to get away scot-free from their responsibilities as lenders and finds it wanting. It outlines the two great excuses that have emerged since the “Great Financial Crisis”, one by borrowers and the other by lenders. Neither rings true in the case of Ireland, a microcosm of the global finance environment over the past ten years. Irish banks stand in the middle of a sandwich between Irish households and international bondholders. Each must pay their price, including bondholders. Read more

Global economic growth changes drivers, not gears

This post reviews the latest IMF data on global economic growth to 2015 and puts it in the context of what has happened since 1980. In real terms, the global economy will reach $100 trillion by 2015, more than three times its 1980 level. What might surprise Westerners, however, is that the pace of economic growth will actually be faster in the period 2008-2015 than the 1980s, 1990s or pre-Recession 2000s. This is because while growth is slowing in the West, which now contributes to the list of world’s slowest growing economies like never before, it’s accelerating across Asia and Africa. Read more

The importance of ease of doing business for economic recovery: evidence from 1,200 new jobs

Two very important reports were released last week, highlighting Ireland’s strong international competitiveness. The first was the World Bank Doing Business rankings for 2011, where Ireland ranked 9th in the world. The second was the IBM Global Investment Trends report, which highlighted Ireland as the top location for FDI jobs on the planet in 2009. This pipeline remains strong, and the post highlights 12 announcements over the past month that are creating 1,200 jobs around Ireland. Read more

What a difference three years makes: How the OECD’s public and private sectors have fared

Last month, the OECD published its latest Economic Outlook, which downgraded expectations for rich-country growth this year. This post digs a little deeper into the OECD database and compares how the private and public sectors have changed over the past three years. It finds that the private sector is paying more to get less in most countries – except the US, Japan and Ireland. It also finds an effective stimulus in the OECD of about 6% of GDP in 2010, compared to 2007. This is largest and – as spending-led – perhaps least sustainable in Ireland and in Denmark. Read more

Putting “light touch” regulation back on the agenda

“Light touch” regulation is now seen as one of the primary contributors to the recent global recession. This post makes the case for true “light touch” regulation – as opposed to simply bad legislation – and warns that this distinction should not be forgotten, as governments attempt to learn from the recession. Not only is light touch not part of the problem, it’s a key part of the solution, if EU estimates of a stimulus of €150bn from reducing red-tape by 25% are anything to go by. Read more