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Tuesday 25 October 2011

Ireland can help teach experts to be modest

In his latest City AM column, Associate Professor of Economics Anthony J. Evans turns his attention to the boom and bust of Ireland, asking what lessons can be learnt in the wake of her economic collapse.

"The narrative behind Ireland's transformation is reasonably clear – a series of policy changes that helped to increase economic freedom helped to deliver strong growth, but this proved unsustainable as a flood of easy money (in the form of government spending and cheap credit) turned growth into boom into bust. The austerity package that the Irish government then enacted is an intriguing test for economic theory. Lest we forget, shadow chancellor Ed Balls seized upon poor growth figures for the second quarter of 2010, declaring that: 'These figures are a stark warning to governments across Europe including our own. That is not a credible economic strategy because lower growth and fewer people in work and paying taxes ultimately leads to a bigger deficit, not a smaller one.'

"Well, guess what?"

To read the rest of the column, please visit City AM online. You can catch up on all of Anthony's recent columns via the ESCP Europe in the Press menu.

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