Ireland is variously used by austerity and anti-austerity advocates to push the flavor of the day.
My suggestion: Ireland is about as useful as an economic model as the Cayman Islands. It’s a tiny economy that’s a tax haven for corporate headquarters. It wins in a game of beggar-thy-neighbor that can’t be scaled or duplicated.
Even worse, the FT outlines how the corporate accounting skews official current account data (and GDP) because of retained profits.
“The reality is that the Irish economy’s competitiveness and its ability to pay down debt is vastly exaggerated in the official figures,” said Philip Lane, an economist at Trinity College Dublin.
Paul Krugman also points out that despite the supposed recovery in Ireland, unemployment remains around 14% compared to 5% before the crisis.
