Modelling external shocks in a small open economy: the case of Ireland

Conefrey, Thomas; O’Reilly, Gerard; Walsh, Graeme

doi:10.1177/002795011824400115

Cited by 9 publications

(6 citation statements)

References 5 publications

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“…They reason that their results could reflect an inability of the Irish economy to adapt either economic policy or industry mix in response to changes in external conditions. Conefrey et al (2018) demonstrate Ireland's exposure to external shocks using the COSMO structural macroeconometric model of the Irish economy (Bergin et al, 2017). Using a Bayesian VAR, Purdue (2018) estimates that the multinational sector is more sensitive to US output shocks than the domestic sector.…”

Section: Introductionmentioning

confidence: 99%

US Corporate Tax Rate Cuts: Spillovers to the Irish Economy

Clancy¹

2019

SSRN Journal

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We examine spillovers to the Irish economy from US corporate income tax rate cuts and find they lead to a small but persistent increase in Irish economic output. Our analysis of the transmission channels shows that an increase in investment, employment and exports in the externally-financed industrial sector largely drives this expansion. We also find that output spillovers from US corporate income tax cuts are larger when there is slack in the Irish labour market. Our findings suggest that the changing structure of the Irish economy means any spillovers to real economic activity from the recent US corporate tax cuts could be relatively minor. However, the larger presence and shifting focus of foreign multinational corporations' operations in Ireland means lessons from past US corporate tax cuts may be of limited value in predicting the effects of the recent US tax system reform.

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Section: Introductionmentioning

confidence: 99%

US Corporate Tax Rate Cuts: Spillovers to the Irish Economy

Clancy¹

2019

SSRN Journal

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“…These results are displayed in Table , where primary sources of employment are in the manufacturing industry. This is in contrast to Ireland's position as a service‐based economy (Conefrey, O'Reilly, & Walsh, ; Healy, ). The manufacture of steel and power conversion modules generates the most employment while other significant employment drivers include device installation and the provision of infrastructure and civil construction activities.…”

Section: Resultsmentioning

confidence: 76%

Regional income and wave energy deployment in Ireland

Farrell

O’Donoghue

Morrissey

2020

Papers in Regional Science

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Alongside environmental benefits, renewable energy deployment is often evaluated on grounds of regional development. Focusing on wave energy deployment in Ireland, this paper quantifies employment-related welfare change net of associated subsidy costs. Although the added employment reduces inter-regional inequality, certain subsidies increase total income inequality by a greater extent.Total inequality increases by 0.25% in the preferred scenario. This pattern of incidence persists under an optimistic scenario where all manufacturing activity is carried out locally. This finding highlights that policies of regional development should consider the spatial distribution of associated subsidy costs. KEYWORDSinequality, spatial microsimulation, regional development, renewable energy JEL CLASSIFICATION D31; H23; Q42; Q43; Q48; R12

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“…The 2006-2009 period falls largely before the 2008 financial crisis started to take effect. A recession then characterised the 2010-2014 time period (Conefrey et al 2018). Finally, the 2015-2019 period was characterised by fast growth of the domestic economy and Irish industrial policy support for both domestic and MNE firms in response to Brexit (Roche et al 2016, Chapter 1).…”

Section: Industry Presences Entries and Exitsmentioning

confidence: 99%

The role of relatedness and strategic linkages between domestic and MNE sectors in regional branching and resilience

et al. 2022

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Despite the key role of multinational enterprises (MNEs) in both international markets and domestic economies, there is no consensus on their impact on their host economy. In particular, do MNEs stimulate new domestic firms through knowledge spillovers? Here, we look at the impact of MNEs on the entry and exit of domestic industries in Irish regions before, during, and after the 2008 Financial Crisis. Specifically, we are interested in whether the presence of MNEs in a region results in knowledge spillovers and the creation of new domestic industries in related sectors. To quantify how related an industry is to a region’s industry basket we propose two cohesion measures, weighted closeness and strategic closeness which capture direct linkages and dense inter-industry links between local industries respectively. We use a dataset of government-supported firms in Ireland (covering 90% of manufacturing and exporting) between 2006 and 2019. We find that domestic industries are both more likely to enter and less likely to leave a region if they are related to so-called ‘overlapping’ industries containing both domestic and MNE firms. In contrast, we find a negative impact on domestic entry and survival from cohesion to ‘exclusive MNE’ industries, suggesting that domestic firms are unable to ‘leap’ and thrive in MNE-proximate industries likely due to a technology or know-how gap. Finally, the type of cohesion matters. During the economic recovery (2015–2019), it is strategic rather than weighted closeness to overlapping industries that is associated with both domestic industry entry and survival.

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Modelling external shocks in a small open economy: the case of Ireland

Cited by 9 publications

References 5 publications

US Corporate Tax Rate Cuts: Spillovers to the Irish Economy

US Corporate Tax Rate Cuts: Spillovers to the Irish Economy

Regional income and wave energy deployment in Ireland

The role of relatedness and strategic linkages between domestic and MNE sectors in regional branching and resilience

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