The fall of the Celtic tiger

By 2000, Ireland had achieved a remarkable macroeconomic performance: 10% economic growth annually, a budget surplus, and a very low debt to GDP ratio. Emigration had disappeared and there was significant immigration from Eastern Europe. Yet, by November 2010, output had collapsed to an extent unprecedented among post war industrial countries, the budget deficit was out of control, and the debt to GDP ratio had soared to around 100%. In an unprecedented development, Ireland was forced to apply for an emergency bail-out package from the Troika (European Commission, European Central Bank, and the International Monetary Fund).

The book that will be presented at this event, “The Fall of the Celtic Tiger” - written by Donal Donovan and Antoin E. Murphy, examines how the Celtic Tiger, a high growth performing economy, fell into a macroeconomic abyss. Few, either in Ireland or Europe, recognised the danger signals because the prevailing economic ideology suggested that financial markets could self-regulate. The book analyses the roles of banks, builders, developers, regulators (the EU, the ECB, the Central Bank of Ireland, and the Irish Financial Regulator), politicians, economists, the media, and a property driven populace during the various stages of the downfall of the Celtic Tiger. It pays particular attention to the decisions to provide a highly controversial comprehensive guarantee for the covered Irish banks in 2008, and the subsequent events that left the government with no alternative but to request the 2010 bail out. Throughout the book, attention is devoted to the allocation of responsibilities for the unfolding crises. It also discusses the impact of measures to help resolve the current euro debt crisis as well as the underlying lessons to be learned from this traumatic period in Ireland's economic and financial history.

Speakers

• Donal Donovan - Member of the Irish Fiscal Advisory Council, Adjunct Professor at the University of Limerick and a Visiting Lecturer at Trinity College Dublin. He was a member of the teams that produced the Governor of the Central Bank of Ireland’s report in May 2010 and the Nyberg Commission’s report in April 2011, both dealing with the causes of the Irish banking crisis. Donal worked in the IMF from 1977 until 2005 when he retired as a Deputy Director. During his career at the IMF, he worked closely with many countries experiencing financial crises. Donal holds a Ph.D. from the University of British Columbia and a bachelor’s degree from Trinity College Dublin.
• Antoin E. Murphy - Associate Professor in economics at Trinity College Dublin, University of Dublin. He has been a visiting scholar at the Center for International Affairs at Harvard, the Institut d’Etude DÈmographiques in Paris, the Hoover Institution and the department of economics at Stanford University. His special interests are in macroeconomics, monetary economics and the history of monetary thought. He is one of the joint managing editors of the European History of Economic Thought.
• Discussant - Zsolt Darvas, Senior Fellow, Bruegel
• Chair - Guntram Wolff, Director, Bruegel

Event materials

• Event summary download
• Antoin E. Murphy, presentation download

Practical details

Venue: Bruegel, Rue de la Charité 33, 1210 Brussels
Time: Tuesday 1 October 2013, 12:45 - 14:30
Contact: Matilda Sevón, Events Coordinator - matilda.sevon[at]bruegel.org