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
    1. They cut spending, taxes, and borrowing
    2. Interest rates were cut to stimulate the economy
  2. Tax Cuts were crucial component of a new social partnership between the working classes
  • 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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