Profits and Wages in Ireland, 1987-1996

Philip Lane

Economics Technical Papers from Trinity College Dublin, Economics Department

Abstract: A striking feature of the Irish economic resurgence since 1987 has been a major factor income shift away from labour towards capital. (The profit share has increased from 25.1 percent in 1987 to 34.8 percent in 1996.) In this paper, we examine the role of the national stratey of wage moderation in explaining this shift, consider its potential benefits and ask whether it is sustainable. We highlight the critical role of fiscal policy in minimising the trade-off between the returns to capital and labour. Finally, imminent membership of a European Monetary Union makes it all the more important not to overshoot the equilibrium rate of wage growth for the Irish economy.

JEL-codes: E25 J38 O52 (search for similar items in EconPapers)
Date: 1998
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Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:tcd:tcduet:9814

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