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The economic transformation of Ireland

May 21, 2014 0 Comment

The economic transformation of Ireland over the last decade has not been brought about by little men in green hats or multitudes of kisses bestowed on the blarney stone. The success can be attributed to two major factors starting with a productivity boom dating from the 50’s and 60’s. Secondly, an employment boom together with a sudden short term aggregate demand that started in the early 90’s. Ireland’s GDP per capita has increased to almost what it was in 1990 (Blanchard, 2000). The unemployment rate has dropped from a large 16 percent to less than 5 percent presenting Ireland as one of the ten most prosperous countries in the world (Blanchard, 2000). For several years Ireland has been focusing on long term productivity through trade liberty which has forced local markets to open to global trade and international investments. The tax policies that were initiated encourage more business trade and industrial activity. A plan that has paid off for Ireland is the attention to education, offering free secondary schooling and low cost university studies. The backbone of the new model of economic growth is the determination of the Republic to invest in human capital and technology (lecture, 2011).

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