Ronan Lyons | Personal Website
Ronan Lyons | Personal Website

Blog

Can Ireland improve its competitiveness while raising taxes?

Making Ireland a more attractive place for FDI, via making it attractive for workers to come and live here is difficult when the environment is one of higher and higher taxes. This post examines Ireland’s changing competitiveness. It first looks at how a family’s mortgage repayment will change between 2005 and 2015. It also examines how after-tax, after-rent income in Ireland compares internationally, finding that significant tax increases are compatible with international competitiveness when offset by falling costs of accommodation. Read more

The economics of flooding in Ireland

Yesterday saw some of the worst flooding in Dublin in recent memory. Today’s post examines the economics behind the floods, in particular what economics can tell us about these events and what they can tell us about economics. Building on doctoral research, estimates are presented of the effect that flood-risk, living near a river, has on house prices and on rents. The baseline appears to be a 5% cost for those living near rivers. Read more

Nine million jobs – the cost of inaction on the global debt crisis

The Nobel Prize in Economics, awarded yesterday, highlighted the important role of expectations. The IMF’s World Economic Outlook has given the world an important barometer of expectations about the economic climate and how they change over time. This post uses IMF figures to estimate how many jobs will be lost over the period 2011-2015 in the Eurozone, the USA and in the rest of the developed world, due to politicians’ inaction on the debt crisis over the last twelve months alone. Read more

Irish house prices: calling the bottom and worrying about the next bubble

The latest Daft Report was released this week and shows asking prices up to 55% below their peak. This post uses the latest figures to estimate when property prices in Ireland will bottom out. It outlines two scenarios, one where the country returns to normal lending conditions, and one where it does not and risks another boom-bust cycle. With the correct steps by the Government, property prices could stabilise in early 2013. Read more

Is Ireland running out of cash buyers? Insights from another property fire-sale

Last week saw Ireland’s third property fire-sale. These auctions give a unique set of data-points for property market analysis. This post analyses the third auction, outlining the typical fall from the peak and the yield achieved, one of the most important metrics in the market. It also highlights some interesting trends comparing the auction results with those from previous auctions. Read more

A Budget 2012 proposal: make all income from the State taxable

The need to close Ireland’s deficit from €15bn to €4bn means that over coming years, €7bn in public sector expenditure will need to be cut. Social welfare payments – almost all of which are not means-tested – comprise one third of the €60bn in discretionary spending each year. This post outlines how to reform the system so that it is simpler and fairer, while generating €2bn in Exchequer savings. Read more

An unwanted experiment: a modern economy without banking

Banking and credit facilitate economic growth and are among the foundations of modern, post-Industrial Revolution economies. This post explores the implications of living in Ireland, a country without the ability to borrow, either as a household or as a small business. It also focuses on the potential of online trading and why the current perverse policy of Irish banks in that area must change. Read more

“Won’t somebody please think of the children?” – Banks, debt and Ireland in the 2050s

It’s become something of a cliché in Irish public discourse to worry out loud about the banking debt being left to our children and grandchildren. Should we worry about this, though? This post outlines the most likely scenario for just much of a burden Ireland’s banking debts are likely to be for our grandchildren, focusing in particular on the role of economic growth and inflation. Read more

Top Ten Facts in Relation to Ireland’s Mortgage Debt & Arrears

Sparked by some figures by Morgan Kelly and a pseudonymous letter to the Irish Times, the last two weeks have seen an immense public debate on the topic mortgage debt forgiveness. This post attempts to step away from the emotional charge of the debate. It examines ten key facts on Ireland’s mortgage debt, in relation to arrears, repossessions, mortgages being paid off and the labour market. It also presents an estimate of Ireland’s aggregate “loan-to-value” for residential property and a comparison with repossessions in the UK, before I give my own thoughts on the topic. Read more

Should we let Michael O’Leary run our income tax system?

This post examines Michael O’Leary’s suggestions in relation to Ireland’s income tax system, in particular making it simpler and ensuring everyone contributes but not too much! It uses recently published Revenue Commissioners figures for income in 2008 to estimate who would like the proposal and who would hate it, Government included. It concludes with a few tweaks to the proposal, including in relation to income earned through social welfare. Read more