The Celtic Tiger

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File:Ireland1.png File:300px-Celtic tiger cartoon.png

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BEFORE THE CELTIC TIGER

Prior to the Celtic Tiger, Ireland's economy and standard of living was horrible.

  • High Unemployment
  • Slow economical growth
  • High Inflation
  • Heavy Taxes
  • Towering public Debts.

Many factors contributed to Ireland's problems.

  • Wrong fiscal policies
  • Protectionism
    is the economic policy of restraining trade between nations, through methods such as high tariffs on imported goods, restrictive quotas, a variety of restrictive government regulations designed to discourage imports, and anti-dumping laws in an attempt to protect domestic industries in a particular nation from foreign take-over or competition.

INTRODUCTION OF THE CELTIC TIGER

The Irish government asserted changes to their economic structure.

  • Fiscal and Monetary consolidation
    1. Fianna Fail government supported opposing party, Fine Gael, and started to change their policies
    • They cut spending, taxes, and borrowing
    • Interest rates were cut to stimulate the economy
  • European Union Interaction
  • Foreign domestic Investment boom
  • Education alterations
  • Low Personal Taxes

Positive Economic Effects

  1. Unemployment rate dropped significantly
    • Fell from 18% in lat 1980's to 4.2% in 2005
    • Average industrial wage grew at one of the highest rates in Europe
  2. Public Debt
    • Dramatically cut to become one of the lowest in Europe (34% GDP in 2001)
    • Public spending doubled without any significant increase in taxation levels
  3. Modern Ireland
    • New transportation services

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    • New monuments
    • Enhanced street appearance
  4. Dual Labor Market
    • Increased the number of highly skilled workers
    • Vast amount of well paid jobs

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Negative Economic Effects

  1. Inflation of prices
    • groceries and chain store prices increased
    • housing property increased
  2. Neglect of certain government responsibilities
    • health care service did not receive sufficient fund
    • at first transportation sector was not reformed
      • transportation system was insufficient
      • road ways could not support all the commuters
  3. Loss of culture among those with high paying jobs
    • Irish people had more money to spend and grew out of old Irish ways
    • There were more expensive cars and designer labels around Ireland
  4. Capitalist Economy Expansion
    • Some desperate workers had to take the low paying jobs that attracted foreign companies to Ireland
      • Unskilled jobs
      • Low wages
      • No job security
    • Poverty levels increased
      • The gap between the rich and the poor grew significantly
      • Inflation of prices
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