Turning Globalisation to National Advantage: Economic Policy Lessons from Ireland?s Experience


Authors: Iulia Siedschlag , John FitzGerald , Stefanie Haller , Marc Schiffbauer , admin , admin

Research Areas: Macroeconomics

Abstract:
This joint TCD/ESRI research project is funded from the Government of Ireland Thematic Research Project Grants Scheme administered by the Irish Council for the Humanities and Social Sciences (IRCHSS). Professor Patrick Honohan, TCD is the Principal Investigator. Professor John Fitz Gerald, ESRI, Professor Frank Barry, TCD, and Dr Iulia Traistaru-Siedschlag, Senior Research Officer, ESRI, are Associate Investigators. Ireland is the most globalised economy in the world, and has consolidated this position over the past two decades, during which aggregate living standards in Ireland suddenly managed to converge to those of the world?s leading economies. This research project will clarify how the forces of globalization influenced the Irish economy and how Ireland managed to cope. Ireland?s successful navigation through the hazards of the emergent global economy have policy lessons for countries that have found globalisation more of a challenge. The central research questions fall into five strands: (i) FDI: how far can productivity growth and the use of new technology in manufacturing and service firms in Ireland be attributed to the direct or indirect effects of inward FDI? (ii) Aid: What characteristics of the institutional arrangements for managing the inflow of foreign aid (EU structural funds) contributed to their effective management and what light does this throw on political economy theories of agency problems in making aid effective? (iii) Capital markets: How far have international capital markets limited the policy space available for Irish fiscal and monetary policy, or have they enhanced the ability of policymakers to deliver good competitiveness, growth and stability outcomes? (iv) Labour market openness: What effect has the reversal of international labour market flows had on productivity, the level and structure of wages and unemployment? (v) Transferability: How might the lessons of Ireland?s experience with globalisation be transferred to other countries with very different institutional structures?

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