Is Ireland Really the Role Model for Austerity?
Cambridge Journal of Economics, Forthcoming
20 Pages Posted: 18 Sep 2011
Date Written: September 17, 2011
This paper describes the causes and consequences of Ireland’s economic crisis in the context of the policy solution implemented to contain that crisis: protracted fiscal austerity. I describe the causes of the recent crisis in Ireland, and look at the logic of austerity with a simple model. I compare the current crisis to the crisis of the 1980s, when fiscal austerity was touted as the trigger for the Celtic Tiger. I discuss the measures implemented to date in the current crisis, tracing their effects on sectors of Ireland’s macroeconomy, and, finally, ask whether Ireland is, indeed, the role model for fiscal austerity in the Eurozone and beyond.
Keywords: Ireland, Austerity, Fiscal Policy, Monetary Policy
JEL Classification: E00, E30, E62, E63
Suggested Citation: Suggested Citation