Deleveraging, Banks and Economic Recovery in Ireland

Daniel Walshe and Dermot O’leary
Additional contact information
Dermot O’leary: Goodbody Stockbrokers

The Economic and Social Review, 2012, vol. 43, issue 1, 165–197

Abstract: : The challenge that the Irish economy faces can best be described in the context of flows and stocks of assets and liabilities. Under the Memorandum of Understanding with the IMF/EU/ECB Troika, Ireland must implement a severe fiscal austerity programme and reduce the size of its banking system. These goals must be achieved in the context of a deleveraging process in the household sector brought about by the need to repair balance sheets following a collapse in the value of housing assets. The current policy mix, which aims to reduce these stocks simultaneously, is unlikely to be successful, a feature we term the domestic trilemma. An external trilemma arising from the constraints of EMU membership also limits the policy choices for highdebt economies attempting to engineer an export-led recovery. This paper argues that a sequencing of policies is required for Ireland to achieve its goals.

Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.esr.ie/article/view/57/51 First version,2012 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eso:journl:v:43:y:2012:i:1:p:165-197

Access Statistics for this article

More articles in The Economic and Social Review from Economic and Social Studies
Bibliographic data for series maintained by Aedin Doris ().