The fiscal compact with Professor of Finance, Brian M Lucey


 

What: The fiscal compact:

When: Saturday, February 11th at 12.00

(Login from 11.50 am)

Professor of Finance Brian M Lucey will be discussing “The fiscal compact”

Brian M Lucey

You can read more on this:

http://brianmlucey.wordpress.com/2012/02/04/the-fiscal-compact-maybe-inevitable-hardly-sensible/

Follow Professor Lucey on Twitter @brianmlucey

Planning for the post euro Irish economy.


What: Planning for the post euro Irish economy.

When: Wednesday, November 16th at 11.30

Professor in Finance Brian M Lucey will be discussing “Planning for a post Euro Economy”

Brian M Lucey

You can read more on this:
http://brianmlucey.wordpress.com/2011/11/11/planning-for-the-post-euro-irish-economy/

Irish Unemployment Policy: An Urgent Debate


What: Irish Unemployment Policy: An Urgent Debate

When: Friday, November 4th at 12.00

 

Dr. Liam Delaney @LiamDelaneyEcon

The dramatic rise in unemployment in recent years is the most urgent policy problem facing the Irish state. Unemployment durations greater than one-year, in particular, are associated with a range of negative long-run social, economic and psychological consequences. While rebalancing the economy in terms of debt, price and fiscal policy following a protracted bubble and collapse is clearly the most direct route to solving this problem, it is also absolutely clear that such a process is a medium-to-long term one and the question of short-run active employment policy must be given greater focus. This debate discusses the current policy environment in Ireland. It will begin with some overviews of the extent of unemployment in different regions and among different demographic groups. It will talk about some likely consequences of the high-level of unemployment in these groups. It will then examine government policy in the area of unemployment during the course of the last three years. The bulk of the discussion will be devoted to discussing current and potential government initiatives in the area of jobs stabilisation. The recent jobbridge initiative has created much debate online and we will discuss the potential for internship and placement programmes. The bringing together of the benefit payment and job placement aspects of the welfare system is another potential opportunity for improvement.  Furthermore the extent to which the cash and non-cash benefit systems creates distorted incentives at the margins of the labour market and how this might be changed will be discussed.
Selected Readings:
1. The papers of Bell and Blanchflower on this topic are very useful – a collection of these are available below
2. The Krueger/Mueller paper “Job Search in a period of Mass Unemployment” is very useful
3. Geary Working paper by me and co-authors on the experience of unemployment in Ireland is useful for getting a sense of the views of people who are unemployment
4. Card et al is one of the most useful papers on the success or otherwise of job activation programmes
Card, D., Kluve, J.& Weber, A. (2010) Active labour Market Policy Evaliations: A Meta Analysis.
NBER Working Paper No. 16173.

Southern Europe – Why it is like Ireland and why it is not.


Our recording from today’s discussion. Many thanks to Professor Joe Haslam for taking the time.
*Tip: Try the HD version.
Joe haslam: 1. Ireland is small open economy v Spain a large closed 
economy
Joe haslam: 2. I live in Madrid and although I travel to other
places, Madrid is not Spain.
Joe haslam: 3. I look more at qualitative trends than quantitative
ones.
Joe haslam: 4. Who I work most closely with is people trying to start
a business
Joe haslam: 5. Civil Service is good, but regional administration and
politicians less so.
Joe haslam: 6. Spain not very open to the world, dont travel much or
speak English
Joe haslam: 7. "Indignados" is a genuine movement. The Spanish like
to protest as they were denied too long. apolitical young people of
the type who have long believed conformity was best strategy for
getting by have become politically assertive
Joe haslam: 8. Health, education and Transport are very good.
Ireland has let these slip.
Joe haslam: 9. Culture of engineer To say your son/daughter is
Engineer is like saying is Ireland that he/she is a lawyer or doctor
Joe haslam: 10. Culture of Home ownership changed completely
Joe haslam: 11. spains economic model is The policy of mass-market
tourism from northern Europe and an expansion of private
home-ownership which had begun in the 1950s has continued right up
to the present day
Joe haslam: 12. Telefonica, Repsol even though private, are like
Semi States. The boards change after elections"you dont know where
the Energy Ministry ends and Repsol begins"
Joe haslam: 13. Crowding out is a big problem ... government
intervention. Creaes too few big firms.
Joe haslam: 14. Medium term I´m very hopeful ... Women into
workplace, young people now with english and outside influences
Joe haslam: 15. Strong links with Ireland ... 50,000 every summer.
Ian Murphy: Any work in wave energy as you have Atlantic coastline
like Ireland?
Ian Murphy: Financials (in terms of public reaction); What is the
view of the populous to massive government debt & attitudes to
difficulties of peripheral eurozone countries.
Ian Murphy: And has the property market suffered recently?  Have
Spaniards invested in the asset class or is it Just domestic
ownership?
You can join us on Thursday 14th July at 12.00 here
Our speaker this Thursday is Joe Haslam, native of Limerick and graduate of UCC.
Joe is an Adjunct Professor at the IE Business School, which is ranked by the FT as the 7th best MBA in the world.
His interests are in the area of Entrepreneurship and Innovation and in particular Disruptive Technology Startups.
Joe Haslam

Joe Haslam

The Economic model of Spain is largely unchanged since the 1950s.
Mass-market tourism from Northern Europe and an expansion of private home-ownership has been the basis of the country Economic Growth through from Dictatorship to Democracy to EU Accession.
It is clear however that this model has to change. It does not produce enough big firms and therefore not enough jobs.
Spains Youth Unemployment rate is over 40% and a movement known as the “indignados” has sprung up to get answers to why their future seems less bright than that of their parents.
Topics to be covered include:
- Spain´s Property Bubble and Banking Difficulties
- Economic Parallels with the other PIIGS countries
- Should we support the “indignados” or are they just whingers
Joe has been interviewed by The Irish Times, Morning Ireland (RTE), the Wall Street Journal and La Razon.
Join him at 12h (Ireland) on webcast from Madrid.

Dr. Liam Delaney discusses Behavioural Economics


Dr. Liam Delaney discusses Behavioural Economics.
http://www.ucd.ie/geary/aboutus/people/liamdelaney/

With thanks to Dr. Stephen Kinsella http://www.stephenkinsella.net/ and the University of Limerick for facilitating today’s session.

The Chat:

Peter Carney >> (All): (queue) Q: Irish data gathering and utilisation is poor; why do you think we are so far behind in this regard? is this a demand or a supply issue?

Colm Harmon >> (All): sorry to be so blunt – fact remains that the data does actually exist in the administrative files of Government and some will to sort them out will transform things

Rob Gillanders >> (All): Since Peter got the ball rolling: Economics is sitll a science even if done without RCTs, no?

Will Hawkes >> (All): If economics in Ireland, and elsewhere around the world, is to move from the macro level to the micro level, do you believe that we will see a resurgence of the praxeological method used by the Austrian School?

Conor Lawlor >> (All): Liam to what extent does the Civil Service/central gov depts collect data? Data that can be used for ‘trials’ and ‘experiments’. Pilots even.The UK civil service has dedicated statistical and social research services and are used quite well. The churn in surveys and data surpasses Ireland by a large amount. They have dedicated statisticians and researchers providing well needed and used data. Data is readily available and it doesn’t take a mission to retrieve.Ireland doesn’t seem to have anything close.

Colm Harmon >> (All): Conor – good point and the data exists. Precisely right track – we need administrative data, with core surveys (like CSO datasets or things like PISA) linked, and experimental policy approaches layered on top.

Martin Ryan >> (All): Just want to link up the comments about RCT’s and Govt. investment in scientific research. Jaffe (1998) and Jaffe (2002) discuss program evaluation of scientific spending. Randomisation and regression discontinuity design (RDD) mentioned by Jaffe.

Rob Gillanders >> (All): I agree Liam. Right tool for the right job… On data stuff: I was shouting at one of Irish Aid’s bigwigs not too long ago about the need to evaluate their interventions and she didn’t even seem to understand why someone might want to do such a thing.

Fearghalx >> (All): Conor, Colm – I’m under the impression that the Civil Service doesn’t even have the capacity for specific Policy Evaluation, let alone for general Reality Evaluation. Should we be more concerned with Bureaocratic Reform rather than Political Reform, given that whatever happens in a given election it’ll be just one lot or the other in power. Or will Shane Ross, Peter Matthews, et al ensure we don’t wreck the economy again?

Fearghalx >> (All): Do we need to introduce more competition in the pension market, or increase regulation, though? Don’t the pension industry have very high charges?

Conor Lawlor >> (All): Ireland doesn’t even have an economic service or statistical service within the civil service? The basics. The administration duties within Irish gov depts is far proportionality higher compared to the UK setup. You can’t expect the ONS to shoulder all data issues. The civil service has a huge role in collecting and providing data.Working in the GES (government economic service) here, you can have a strong influence on policy that’s very well reflected in society. You are supported by a strong research staff of statisticians and social researchers. Better decisions are made based on a foundation of well collected data. Also, on salaries a lot lower than general admin staff in Ireland. Not in Ireland of course- most economic research is privatised and dissected by groupings of administration staff within central depts.

eamonn kinsella >> (All): ”Govt can facilitate not influence or create innovation”..? What of the influences of lobbyists, and,”outside” interested parties directional driving monies?Bureaucracy needs tailoring as Rob said.But does this mean the Legals elite will have to be challenged? Can’t see that happen easily, if at all.

Rob Gillanders >> (All): can they opt everyone into a pension and still take a chunk of it as a levy?

Martin Ryan >> (All): Liam, following on from your point that Governments should not choose areas of priority for scientific research, I just want to flag that there is still a case for Govt. investment in basic scientific research. It has been shown that basic research has a higher return than applied research (Lichtenberg and Siegel, 1991). However the returns can come quite late and in unexpected ways. Due to time-lags (as discussed by Mansfield, 1998) and unexpected outcomes (as discussed by the U.S. Committee onEngineering and Public Policy, 1999), estimates of the return togovernment investment in basic scientific research may be downward-biased.

Rob Gillanders >> (All): small chunk

Fearghalx >> (All): Martin, that might make it a high risk proposition for a small economy like Ireland’s. Might be better to pursue basic research through a European framework

Rob Gillanders >> (All): my basic financial econ is well rusty, but does theory say people diversify fully conditional on being investors or everyone invests and does it “properly”?

karl deeter >> (All): Liam, at what point do you divide between libertarian paternalism and any presumed societal responsibilities toward the individual (eg: if a person decideds to not take out health insurance, you can’t turn them away, so what is the solution?)

talentcoop >> (All): History, parents, background, education affect – Value ‘roof over head’ prime security. ‘Cash is king’, ‘Not for the likes of us’ IMHO

Martin Ryan >> (All): Fearghal, you have hit on the main recommendation of Ireland’s Innovation Task Force. A central idea in the Irish case is to focus on being a “clever copycat”. This is based on evidence that the absorption of foreign knowledge is an important factor for economic growth (Bye et al., 2009).

eamonn kinsella >> (All): Diversify? We are an island.That cannot be left out of calculations re our lack of ‘actual’ access to markets without cost, and with the disconnect thinking that accompanies being not a part of the mainland. #Less risky

Peter Carney >> (All): do we underdiversity because we don’t *trust* anything intangible. it may not be just a *risk* issue

karl deeter >> (All): folks: please forward the link to the playback on this one to ppl you know. It is policy gold in the making. (disclosure: I’m a fan of Liams but it’s still cracking economic thinking that can be applied to policy)

Marie >> (All): Peter Carney – yes we joke about this in Malta. Our investors are still in “stone age” and they only trust physical property.

Martin Ryan >> (All): One point was that the negative effect of unemployment (on well-being, I think) is bigger than the effects of divorce and well-being. Liam presented that result in Limerick this morning

Peter Carney >> (All): Marie – how do we instil trust in financial instruments ? i presume we need more than education. i suggest we need concrete (pardon the pun) legislation that ensure we have prudent and transparent financial regulation. Despite our downfall here — we haven’t had this debate

Ken Curtin >> (All): as someone who has been unemployed from pesonal experience over last year or so Liam is on the button

Martin Ryan >> (All): *Typo: effect of unemployment bigger than the effects of divorce and chronic illness

scooter >> (All): Were u in Limerick today? Where was the presentation on?

talentcoop >> (All): Negativity breeds negativity and depression in unemplyment. Review needs to focus on aspiration, esteem building, real solutions for unemplyed.

Colm Harmon >> (All): this is not a frontier – this is just economics – it is an amazing movement for the discipline

Rob Gillanders >> (All): can I rail against liberal paternalism now, LD?

Emer OSiochru >> (All): Did you not attend Smart Taxes & Tasc conference last Monday where the Job Guarantee was discussed by Dr Randall Wray from MMT perspective? Videos and presentations will be up soon

Martin Ryan >> (All): @scooter. Not in Limerick. Just paraphrased Liam

eamonn kinsella >> (All): Liam that was a huge point on demoralisation of the unemployed.Great debate topic and should follow that thread you spoke of.Thank you for that.

Martin Ryan >> (All): Liam, did you see the comments by Master of the High Court Edmund Honohan that banks were driving some debt-ridden borrowers to suicide?

Peter Carney >> (All): risk v trust ??

Fearghalx >> (All): Investigating what works for the unemployment is a great idea – it’s a tragedy that we have such a large sample, but we could put it to some use

Emer OSiochru >> (All): Government can leave the euro – only way to solve unemployment – or be prepared to leave to encourage reform of ECB.

scooter >> (All): biggest problem in Ireland right now is the destruction of trust by unethical practices in the business world by employers etc.

talentcoop >> (All): Emer – support that

Rob Gillanders >> (All): micro-macro paradox?

Emer OSiochru >> (All): What about suicide and debt link?

scooter >> (All): debt forgiveness for unemployed mortgage holders?
Martin Ryan >> (All): Debt forgiveness? Legal system needs to be changed?

Emer OSiochru >> (All): Debt forgiveness full stop. Morald hazard my arse.

Rob Gillanders >> (All): I’d feel distressed if I ended up paying for other peoples silly mortgages :P

Martin Ryan >> (All): Moral hazard is good point. Links in to ideas of “fairness” in behav econ?

scooter >> (All): the banks have got paid anyway via recap so why no forgiveness. Plus mortgage around shackle of person can b exploited by ppl in business too.

Fearghalx >> (All): I’m not sure I agree with Moral hazard being a problem – lessons have been learned, won’t be repeated
Fearghalx >> (All): Yes, what Liam said

Killian McCarthy >> (All): Do we need serious amendments to Irish bankruptcy legislation to offset a general malaise for people in debt (and suicide in extremes) and can this be done without offering over-incentivising bankruptcy without pursuing any and all alternatives?

Fearghalx >> (All): Thank you all
Kate >> (All): thanks!
Conor Lawlor >> (All): cheers.
Peter Carney >> (All): Thanks!
Rosie OFlynn >> (All): tHANK YOU!
Catherine OMelia >> (All): Thanks
Simon >> (All): thanks!
Fearghalx >> (All): yes
Clare D >> (All): Great session Liam, thanks.
eamonn kinsella >> (All): The unemployed, we should look at them as an asset and formulate their return positively(a new different approach), and not as a problem. One problem impedeing this is govt approach to the issue.eg:If local govt.’s were given their budgets, they would be managed more conscientiously with better placement. Thanks .Brill
Fearghalx >> (All): Hi joe, one technical question – I’m using Firefox and the comment window keeps reverting to default size and location. Any way of keeping it fixed?
Fearghalx >> (All): thanks Joe
scooter >> (All): bye

Irish Policy Reform and Behavioural Economics


This Friday at 2pm < Yes Friday the 13th :)

Dr. Liam Delaney PhD will be speaking on Irish Policy Reform and Behavioural Economics. The session will examine the main threads in the literature from behavioural economics and what they imply for the development of the Irish economy. I have posted on this topic extensively and my posts on Irisheconomy.ie

To join in the discussion, just go to the following link and sign in at 2pm on Friday.

The session will examine the following topics:

  • What role do behavioural economic ideas have in developing a recovered Irish economy?
  • To what extent should we take seriously the new literature on well-being and economics? What does it imply for Irish policy?
  • What kind of evidence and expertise should the government put together to create and analyse meaningful public policies?
  • Should the state be more or less paternalistic in areas such as pensions and health insurance?

The Irish pension system will move to an automatic enrolment system in 2014. This effects almost every private sector work currently without a pension. Where does the idea come from and what are the potential benefits and costs of such a system?

Peoples Economy Ronan Lyons Day 9.


Please visit with http://thepeopleseconomy.com/ for more details.
If we don’t default, what’s the best way to pay off our debt?

pdosullivan >> (All): Looking good Ronan!

Peter >> (All): Why were SF and New Vision not more vocal about borrowing money from China as an option if the EU/IMF do not play ball?

Steve Daley >> (All): Hey Ronan, I’ll throw in some questions ahead of the crowd. To get started, whilst there is clearly scope for tax reform. Isn’t it more urgent to discuss how we can grwo the economy. This may mean borrowing in order to invest. Rather than fiscal probity which smacks of accepting budget constraints and diminishing the scope for investment (not consumption).

Vicky >> (All): What model is best 50/50 cuts/tax 33/66 – I would prefer 0/0 myself

pdosullivan >> (All): At least unlike Dylan Haskins you have started shaving.

lorcanrk >> (All): Thoughts on a flat tax?

MediaBite >> (All): Can you say exactly what cuts you advocate for public service?

pdosullivan >> (All): What ratio of tax increases to spending cuts would you advocate the incoming government adopt?

Peter >> (All): The corporation tax surely ameeting with Obama on Mar 17th is more important about this than one with Merkil and co. We need American corporations here more than we need Europe

pdosullivan >> (All): What are your thoughts re privatisation?

MediaBite >> (All): Re PS cuts – there  is waste for sure – things like the VECs are massively expensive, anachronistic and unnecessary – using up money desperately needed for frontline.

monagt >> (All): what did Japan do re national deby? and wat about a deflationary environment

Steve Daley >> (All): The fiscal deficit is a result of the declining tax revenues, which are due to the decline in a private sector one-sidedly dependent on a consumer and property bubble. Therefore, is focusing on tinkering with the tax base a case of treating the symptoms rather than than the cause?

re >> (All): What are you thoughts on the role of Social Impact bonds – shift to alternative models of delivery ‘public’ services like UK

kourosh >> (All): In your opinion who has given the most realistic proposal for getting Ireland out of this mess?

Mick >> (All): Is there any difference between the way FG, Labour and FF intend to deal with the national debt. They seem different on the surface so long as Europe agree with the different parties plans. Resulting in no change with new government

MediaBite >> (All): We didnt just cut spending aggressively – se sent all our young  people away in the 80s.  Worth it? No.

Aoife Walsh >> (All): Are you concerned at FG’s proposal not to introduce a site value or property tax but instead give Local Authorities the autonomy the cut services or increase revenue through rates or a site sales value tax?

Felim >> (All): Ronan — at some point can you run over the figures for spending/tax burden again by household?

giada >> (All): in Ireland taxes might be lower than other EU states, but in other EU states taxes cover services like health/medical and waste

Vicky >> (All): USC is not fair – I got 80 euro pay rise with it – someone getting paid 1/2 what I get paid got a 190 decrease

monagt >> (All): do u propose a large prop tax?

Felim >> (All): I got: 120pm bank debt; 220 + 100pm for gov debt; 800 social welfare; 300 education; 400 health & 200 capital.

Steve Daley >> (All): There are drastic inefficiences in public service, and restructuring the public sector will mean some cuts but real changes will demand much more commitment to achieve. Increasing taxes is inevitable, but this should be a short-term expedient to ease the restructuring of state spending and maintaining public investment. Therefore, reform of public sector and restructuring the private economy is far more important for future prosperity.

pdosullivan >> (All): What’s your view on capital gains tax – should it be raised or not?
please tweet folks http://bit.ly/iko8J4 Government Deficit taxes and cuts with @ronanlyons

Declan Ganley >> (All): Quality stuff, well done & thank you, have to split.

Aoife Walsh >> (All): Would you go along with TASC’s recommendation that those on lower incomes would be exempt or can defer payment?

Steve Daley >> (All): I’m bamboozled by a discussion of the individual benefits of tax reform. This reduces economic discussion to the banality of parish-pump politics. There are bigger issues that require political courage to tackle the rudderlessness of public spending and structural weaknesses of private sector

lorcanrk >> (All): Oi! Leave the farmers alone :)
Mick >> (All): People who didnt pay stamp duty had that cost built into the cost of the house by the developer

Michael Garrahan >> (All): Ronan, It appears to me that “traditional economics” i.e. the idea that we are motivated soley by economic benefit alone is not working. Do you see a role for a greater emphasis on  Behavioural Economics going forward?

MediaBite >> (All): By far the greatest amount of waste in the public sector arises from, incompetence, corruption and the near total absence of mechanisms for accountability and transparency

Mick >> (All): Is there any difference between the way FG, Labour and FF intend to deal with the national debt. They seem different on the surface so long as Europe agree with the different parties plans. Resulting in no change with new government or am I wrong

pdosullivan >> (All): A property tax under the guidelines you suggest – with all the exemptions etc – would be complicated and expensive to implement. Surely it’s easier to just raise existing taxes / close off loopholes etc.

MediaBite >> (All): Standard cost/benefit analysis is desperately needed. Most of the waste is by senior and middle management not frontline staff or they pay rates

nollaig >> (All): Is the goverment spending to much in general to provide the services we need. How do we know we are getting value for money. People would pay extra taxes if they got a return. At present we pay all these taxes high tranactional low wealth & income taxes and when we look to use service we get charged again.

re >> (All): Think CSO are looking at wider measures – SROI – step in right direction

lorcanrk >> (All): Farmers and now widows allowance? I feel we might fall out before the end of this :P

Vicky >> (All): So you get Widows Pension even if you have a million life insurance?

Steve Daley >> (All): If we rise taxes we will be reducing the fiscal deficit, and possibly satisfy Brussels. However, without a robust commtment to investing in the future, isn’t this a case of learning to accept austerity. The Irish private sector isn’t creating enough value and it won’t until Ireland as a society challenges the unproductive consumption economy we have.

Heather >> (All): Is widow’s allowance only for females? no widower’s allowance?

Vicky >> (All): There should be one MEANS TEST used for all and that would cut out the ADMIN

lorcanrk >> (All): @Heather, it is for all spouses. I’m male and I’m getting it

nollaig >> (All): The health care budget in ireland includes alot of spending thats not inculded in other countries like social welfare

nollaig >> (All): Social welfare is there to gave a base standard of living if you are already above that base whats the piont in getting more it just takes from those that need it. That is why all payments should be means tested or self certified income

Steve Daley >> (All): Paying taxes is a stupid way understanding the fiscal deficit. Public servants who pay taxes do not contribute to tax revenue as they are tax eaters anyhow. It’s the private sector who fund the state, whether through indirect and direct taxes. This means that weaknesses of the private sector are the key determinant of the fiscal balance

Aoife Walsh >> (All): Have to go but well done Ronan.re >> (All): have to go – thanks ronan and looking forward to see rest on video

pdosullivan >> (All): Do you think we should consider going back to the punt?

JB >> (All): FG made an announcement where they were talking about segregating primary and secondary classes based on nationality / language abiliity. A two-tier education system.

nollaig >> (All): For Irish SME’s there should be a mentor prog. for to start exporting Also mentor prog. for SME’s to sell online that will give the fastest export boost

liam >> (All): Can be small number of sectors employing large numbers of peopel, large number of CO’ employing small numbers of people

Steve Daley >> (All): Do you not think there is a big difference between productive employment and consumption services?

Steve Daley >> (All): Are you underestimating the challenge facing Ireland? Even during the Celtic Tiger and credit bubble, the Irish productive sector has languished

liam >> (All): So how about the Multi-nationals? there is a story there with the SME’s, how many JDA’s or licencing agreements do we have with Google?  Can we do more there? (I think we probbaly can)

Steve Daley >> (All): I agree re services, and I think may people confuse the need for productive activity in the economy with the need for manufacturing. Key issue is: are we adding value or simply shuffling around value created elsewhere and taking a cut

mick >> (All): who should we vote for and leave of the ballot sheet

nollaig >> (All): Mentoring progs has also to be had in effeicency drive for irish SME’s and how techology can help inculding business process reengineering