Yu Hsing

Correspondence: Yu Hsing, yhsing@selu.edu

Department of Management & Business Administration, Southeastern Louisiana University, USA

pdf (369.55 Kb) | doi:

Abstract

Applying aggregate demand and aggregate supply model and based on a quarterly sample during 2003.Q1 – 2015.Q1, this paper finds that Ireland’s aggregate output is positively associated with real appreciation, German real GDP, the real stock price and labor productivity and negatively influenced by government debt as a percent of GDP, the real lending rate and the expected inflation rate. The insignificant coefficient of the real oil price indicates that Ireland is energy efficient and that a higher real oil price would not impact its aggregate output negatively. Recent euro depreciation would not help Ireland’s aggregate output, and recent decrease in government debt as a percent of GDP would help increase aggregate output.

Keywords:

  Exchange rates; Government debt; Oil prices; Stock prices; Productivity

References

Bailey, D. and H. Lenihan (2015) A Critical Reflection on Irish Industrial Policy: A Strategic Choice Approach. International Journal of the Economics of Business, 22, 47-71.

Barley, R. (2015a) Ireland Shows How to Ski Down the Debt Mountain: Ireland's Debt Soared As A Result of Its Banking Crisis But Now Debt Is Falling Far Faster Than Forecast. Wall Street Journal (Online) [New York, N.Y], September 27.Barley, R. (2015b) Ireland's Economy: The Eurozone Comeback Kid: Ireland's Banking Bust Did A Lot of Damage, But The Rebound Has Been Sharp. Wall Street Journal (Online) [New York, N.Y], December 10.Barrett, A. and S. McGuinness (2012) The Irish Labour Market And The Great Recession. DICE Report, 10, 27.Barro, R. J. (1974) Are Government Bonds Net Wealth? Journal of Political Economy, 82, 1095-1117.Barro, R. J. (1989) The Ricardian Approach to Budget Deficits. Journal of Economic Perspectives, 3, 37-54.Bénétrix, A. S., P. R. Lane and J. C. Shambaugh (2015) International Currency Exposures, Valuation Effects and the Global Financial Crisis. Journal of International Economics, 96, S98-S109.Bradley, J. and G. Untiedt (2012) Emerging from Recession? Future Prospects for the Irish Economy 2012-2020. (No. 4-2012) Hermin.Byrne, D. and K. McQuinn (2014) Irish Economic Performance 1987-2013: A Growth Accounting Assessment. Quarterly Economic Commentary, 59, 1-82.Buchanan, James M. (1976) Perceived Wealth in Bonds and Social Security: A Comment. Journal of Political Economy 84, 337–342.Cebula, R. J. (1997) An empirical Note on The Impact of the Federal Budget Deficit on Ex Ante Real Long Term Interest Rates, 1973-1995. Southern Economic Journal, 63, 1094-1099.Cebula, R. (2014a) Impact of Federal Government Budget Deficits on the Longer-term Real Interest Rate in the US: Evidence Using Annual and Quarterly Data, 1960-2013.Cebula, R. J. (2014b) An Empirical Investigation Into The Impact Of US Federal Government Budget Deficits on the Real Interest Rate Yield on Intermediate-Term Treasury Issues. 1972–2012. Applied Economics, 46, 3483-3493.Cebula, R. J. and P. Cuellar (2010) Recent Evidence On The Impact Of Government Budget Deficits On The Ex Ante Real Interest Rate Yield On Moody’s Baa-Rated Corporate Bonds. Journal of Economics and Finance, 34, 301-307.Cebula, R. J., F. Angjellari-Dajci and M. Foley (2014) An Exploratory Empirical Inquiry into The Impact of Federal Budget Deficits on the Ex Post Real Interest Rate Yield on Ten Year Treasury Notes over the Last Half Century. Journal of Economics and Finance, 38, 712-720.Centonze, A. L. (2014) The Irish Banking Crisis. Review of Business & Finance Studies, 5, 85-108.Clarke, B. J. and N. Hardiman, (2012) Crisis in the Irish Banking System. UCD Geary Institute Discussion Paper Series WP2012/03.Creedon, C., T. Fitzpatrick and E. Gaffney (2012) Ireland’s External Debt: Economic and Statistical Realities. Economic Letter Series, 12, 1-7.

Darrat, A. F. (1989) Fiscal Deficits and Long-Term Interest Rates: Further Evidence from Annual Data. Southern Economic Journal, 56, 363-373.Darrat, A. F. (1990) Structural Federal Deficits and Interest Rates: Some Causality and Cointegration Tests. Southern Economic Journal, 56, 752-759. Everett, M., J. Kelly and F. Mccann (2015) International Banking and Liquidity Risk Transmission: Evidence from Ireland. IMF Economic Review, 63(3), 542-567.Feldstein, M. (1976) Perceived Wealth in Bonds and Social Security: A Comment. Journal of Political Economy, 84, 331–336.Feldstein, M. (1982) Government Deficits and Aggregate Demand. Journal of Monetary Economics, 9, 1-20.Filiz Baştürk, M. (2015) The Responses of Greece and Ireland to the Crisis. Journal of Administrative Sciences/Yonetim Bilimleri Dergisi, 13.Fitzgerald, J. (2014) Ireland’s Recovery from Crisis. In CESifo Forum (Vol. 15, No. 2, pp. 08-13). Ifo Institute for Economic Research at the University of Munich, July.Findlay, D. W. (1990) Budget Deficits, Expected Inflation and Short-Term Real Interest Rates: Evidence for the US. International Economic Journal, 4, 41-53.Gerlach, S., R. Lydon and R. Stuart (2015) Unemployment and inflation in Ireland: 1926–2012. Cliometrica, 1-20.Gerlach, S. and R. Stuart (2014) Money Demand in Ireland, 1933-2012.Gray, A. W. (2015) Industrial policy in a small open economy: the case of Ireland. In Economic Planning and Industrial Policy in the Globalizing Economy (pp. 239-256). Springer International Publishing.Guo, H. and K. L. Kliesen (2005) Oil Price Volatility and U.S. Macroeconomic Activity. Federal Reserve Bank of St. Louis Review November/December, 669–683.Gupta, K. L. (1989) Budget Deficits and Interest Rates in the US. Public Choice, 60, 87-92.Gylfason, T. and M. Schmid (1983) Does Devaluation Cause Stagflation? Canadian Journal of Economics, 641-654.Gylfason, T. and O. Risager (1984) Does Devaluation Improve the Current Account? European Economic Review, 25, 37-64.Hamilton, J. D. (1996) This is What Happened to the Oil Price–Macroeconomy Relationship. Journal of Monetary Economics, 38, 215–220.Hoelscher, G. (1986) New Evidence on Deficits and Interest Rates. Journal of Money, Credit, and Banking, 18, 1-17.Honohan, P. (2016) Debt and Austerity: Post-Crisis Lessons from Ireland. Journal of Financial Stability.Kalyoncu, H., S. Artan, S. Tezekici and I. Ozturk (2008) Currency Devaluation and Output Growth: An Empirical Evidence from OECD Countries. International Research Journal of Finance and Economics, 14, 232-238.Keane, C. (2015) Irish Public Finances through The Financial Crisis. Fiscal Studies, 36, 475-497.Kilian, L. (2008a) The Economic Effects of Energy Price Shocks. Journal of Economic Literature, 46, 871–909.Kilian, L. (2008b) Not All Oil Price Shocks Are Alike: Disentangling Demand and Supply Shocks in the Crude Oil Market. CEPR Discussion Paper No. 5994.Kim, G., L. An, and Y. Kim, (2015) Exchange Rate, Capital Flow and Output: Developed versus Developing Economies. Atlantic Economic Journal, 43, 195-207.Kitchin, R., R. Hearne and C. O'Callaghan (2015) Housing in Ireland: From Crisis to Crisis. Available at SSRN 2566297.Lane, P. R. (2012) The Dynamics of Ireland's Net External Position. Journal of the Statistical and Social Inquiry Society of Ireland, 41, 24–34.Lane, P. R. and J. C. Shambaugh (2010) Financial Exchange Rates and International Currency Exposures. American Economic Review, 100 (1), 518–540.Lawless, M., F. McCann and T. McIndoe Calder (2014) SMEs in Ireland: Contributions, Credit and Economic Crisis. Policy Studies, 35, 435-457.Lucey, B. M., C. Larkin, and C. Gurdgiev (2014) Learning from the Irish Experience–A Clinical Case Study in Banking Failure. Comparative Economic Studies, 56(2), 295-312.McHale, J. (2012). An Overview of Developments in the Irish Economy over the Last Ten Years. The World Economy, 35, 1220-1238.McMillin, W. D. (1986) Federal Deficits and Short-Term Interest Rates. Journal of Macroeconomics, 8, 403-422.McQuinn, K. (2014) Bubble, Bubble Toil and Trouble? An Assessment of the Current State of the Irish Housing Market. Quarterly Economic Commentary, 55.McQuinn, K. (2015) European Fiscal Policy during the Crisis: An Irish Perspective. Quarterly Economic Commentary, 79.Moreira, A. R. G. F. (2009) The Macroeconomic Effects of (Different) Oil Shocks: A VAR Approach.Morley, S. A. (1992) On the Effect of Devaluation during Stabilization Programs in LDCs. Review of Economics and Statistics, 74, 21-27. Moutos, T. (2014) Comment on “Ireland’s Economic Crisis: The Good, the Bad and the Ugly”. Journal of Macroeconomics, 39, 441-443. Ostrosky, A. L. (1990) Federal Government Budget Deficits and Interest Rates: Comment. Southern Economic Journal, 56, 802-803. Pepino, S. (2015) The Irish Sovereign Debt Crisis. In Sovereign Risk and Financial Crisis (pp. 96-120). Palgrave Macmillan UK. Ratha, A. (2010) Does Devaluation Work For India? Economics Bulletin, 30, 247-264. Ryan, P. and C. Branigan (2015) The Irish Real Estate Bubble: A Behavioral Finance Perspective (No. eres2015_159). European Real Estate Society (ERES). Sakellaridis, G. (2012) The Political Economy of Public Debt and Austerity in the EU. E. Papadopoulou (Ed.). Nissos Publications. Segal, P. (2011) Oil Price Shocks and the Macroeconomy. Oxford Review of Economic Policy, 27, 169-185.  Spadaro, A., M. Carré, L. Piccoli and R. Magnani, (2013) Would A Euro's Depreciation Improve the French Economy? Working Paper. Testaiuti, D. (2015) The Rise and the Fall of the Celtic Tiger: The Effect of FDI on the Irish Economy And A Case Study. Van Aarle, B., J. Tielens and J. Van Hove (2015) The Financial Crisis and Its Aftermath: The Case of Ireland. International Economics and Economic Policy, 12, 393-410. Wachter, S. (2015) The Housing and Credit Bubbles in the United States and Europe: A comparison. Journal of Money, Credit and Banking, 47(S1), 37-42.Whelan, K. (2013) Ireland's Economic Crisis: The Good, the Bad and the Ugly. Working Paper Series No. 13/06), UCD Centre for Economic Research.