Working Paper: CEPR ID: DP8287
Authors: Philip R. Lane
Abstract: This paper has three goals. First, it seeks to explain the origins of the Irish crisis. Second, it provides an interim assessment of the Irish government?s management of the crisis. Third, it evaluates the lessons from Ireland for the macroeconomics of monetary unions.
Keywords: EMU; Irish Crisis
JEL Codes: E5; F4
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| aggressive lending by the Irish banking system (F65) | property boom (E32) |
| property boom (E32) | significant economic crisis (G01) |
| decline in property prices and collapse in construction activity (L74) | severe losses in the banking system (F65) |
| severe losses in the banking system (F65) | economic crisis through credit squeeze and fiscal crisis (G01) |
| structural issues in the economy (L16) | fiscal balance deterioration (H69) |
| costs of recapitalizing the banking system (G28) | fiscal balance deterioration (H69) |
| entry into EMU (F36) | inflationary pressures (E31) |
| inflationary pressures (E31) | subsequent economic instability (N14) |