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Debt and austerity: post-crisis lessons from Ireland
Patrick Honohan
San Francisco, January 2016
Ireland: Unemployment rate 1998-2015
0
2
4
6
8
10
12
14
16
0
2
4
6
8
10
12
14
16
18
-14 -12 -10 -8 -6 -4 -2 0 2 4 6 11 13
% o
f la
bo
ur
forc
e
Years from 1981 and 2007
1967-92
1993-2015
Ireland: Total employment 1998-2015
1500
1600
1700
1800
1900
2000
2100
2200
ILO Definition
Ireland: Real Personal Disposable Income Annual 1997-2015
€m
n
(20
11
pri
ces)
50000
55000
60000
65000
70000
75000
80000
85000
90000
95000
100000
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
f
Irish Real House Prices 1971-2015
Deflated by CPI; DOE Series (new houses) to 2010, then CSO
0.5
1
1.5
2
2.5
3
3.5
4
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
Index,
1971=
1
Ireland: General Government Surplus (% GDP)
-35
-30
-25
-20
-15
-10
-5
0
5
10
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
Underlying
Headline
0
25
50
75
100
125
Ireland: General Government Gross Debt (% GDP)
0%
20%
40%
60%
80%
100%
120%
-15 -10 -5 0 5 10
2008
1981
Ireland: National debt as % GNP, two fiscal cycles 1966-95 and 1993-2015
10
12
14
16
18
20
22
24€ 0
00
pe
r h
ea
d (
rea
l)
No housing bubble (02-07) + No domestic crisis (07-13)
Consumption per head, actual
Consumption per head in Ireland with and without property bubble, 1995-2013
Source: based on model simulations conducted by T. Conefrey, Central Bank of Ireland
0.25
0.3
0.35
0.4
0.45
0.5
0.55
0.6
2004 2005 2006 2007 2008 2009 2010 2011 2012
Gini mkt y
Gini disp y
Ireland: Gini pre and post redistribution
Source: OECD income inequality statistics
0.511 0.514
0.582
0.324 0.305 0.304
0.25
0.3
0.35
0.4
0.45
0.5
0.55
0.6
2004 2005 2006 2007 2008 2009 2010 2011 2012
Gini mkt y
Gini disp y
Ireland: Gini pre and post redistribution
Source: OECD income inequality statistics
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
0.5
2004 2005 2006 2007 2008 2009 2010 2011 2012
Poverty rate 50% before
Poverty rate 50% after
Ireland: 50% poverty rate pre and post redistribution
Source: OECD income inequality statistics
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
0.5
2004 2005 2006 2007 2008 2009 2010 2011 2012
IRL before UK before
IRL after UK after
Ireland and UK: 50% poverty rate pre and post redistribution
Source: OECD income inequality statistics
Net wealth by age group 2006 and 2013
Source: Lydon and McIndoe-Calder (2015, forthcoming)
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
under-25 25-34 35-44 35-54 55-64 65-74 75+
20062013
Median net wealth (€, nominal) in 2006 and 2013
