Download + Economy of Ireland Tutorial 3 HT Growth in Living Standards & Output

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Economy of Ireland
Tutorial 3 HT
Growth in Living Standards & Output
General
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 Office
hours: Tuessday 12.30-13.30
 Website:
http://www.tcd.ie/Economics/staff/johagan/ec2020%20HT/
 Slides: Will be
put online at the end of each teaching week.
The Plan for Today
 G1(ii) & G1 (iii)
from your Hilary term hand-out
 Topic: Growth in
 Refer to:
Living Standards & Output
Chapter 7 in the book
G1 (ii)
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 What
drives productivity growth (i.e. GDP per person
employed) in any economy?
 Discuss
in terms of human capital, physical capital,
institutions, natural resources and technology making
reference to the Irish experience.
 What drives productivity growth? Discuss role of:
 Human Capital
 Physical Capital
 Institutions
 Natural Resources
 Technology
 Refer to the Irish experience
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 To
What drives Productivity Growth?
frame our discussion:
Q/E = q = A .f(k, h, i, r)
 Where
 k: Capital Stock  Investment
 h: Human
in physical capital
Capital  Investment in people
 i: Institutions 
“Economic productivity strongly influenced by
the fundamental structure of economic organisations”
 r: (natural) Resources 
 A: Technology
harnessing our natural resources
 central to the process of growth!
What drives Productivity Growth?
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 To
frame our discussion:
Q/E = q = A .f(k, h, i, r)
 Can you
think of an example of each and how they impact on
growth?
 Do we
observe diminishing returns?
 What
about the relationship between these factors – are they
independent or linked?
 Refer to
Irish Experience ?
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G1 (iii)
 How would you briefly describe
the Irish growth
experience in the last 10 years and what are the
prospects for growth in Ireland 2016-2020 would you
argue?
 Describe Irish
growth experience in the last 10 years
 What are the prospects for growth in Ireland 20162020?
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Describe the Irish growth Experience in last 10
years
 Time
period 2005-2015
 Growth
and Prosperity at tail end of the ‘Celtic Tiger’
 Recession in
late 2008
 Growth emerging again
 Factors behind
growth up to 2008 applying again:
 Openness of the Economy
 Favourable tax rates
 US Firms
 Single European Market
 Attitudes
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What are the prospects for future growth in
Ireland?
 Give
your opinions – but balance with informed reasoning
 Good
Starting Point: We are a small open economy
 Therefore
Internal Factors important
 But important consideration
needs to be given to External
Factors
 What
might we include in both categories that may impact
growth going forward?
 Both positives
 Examples?
and negatives to consider
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Some Links
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https://www.esri.ie/news/new-report-on-the-economicconsequences-of-brexit-for-ireland/
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http://www.esri.ie/news/sentiment-increases-in-first-monthof-2016/
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http://www.irishtimes.com/opinion/editorial/indications-thatthe-chinese-economy-has-slowed-down-after-years-of-stronggrowth-1.2317326
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http://www.irishtimes.com/business/economy/oecdupgrades-irish-gdp-forecasts-for-2015-2016-1.2422776
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http://www.irishtimes.com/business/economy/oecd-s-bepsreport-likely-to-drive-corporation-tax-rates-down-1.2376866
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http://www.irishtimes.com/news/consumer/whatplummeting-oil-prices-mean-for-you-1.2496914