Economy of Ireland Tutorial 3 HT Growth in Living Standards & Output General  My email: kinghanc@tcd.ie  Office hours: Monday 11.30-12.30  Website: http://www.tcd.ie/Economics/staff/johagan/ec2020/  Slides: Will be put online at the end of each teaching week. The Plan for Today  G1(ii) & G1 (iii) from your Hilary term hand-out  Topic: Growth in Living Standards & Output  Refer to: Chapter 7 in the book G1 (ii)  What drives productivity growth (i.e. GDP per person employed) in any economy? Discuss in terms of human capital, physical capital, institutions, natural resources and technology making reference to the Irish experience.  What drives productivity growth? Discuss role of:  Human Capital  Physical Capital  Institutions  Natural Resources  Technology  Refer to the Irish experience What drives Productivity Growth?  To frame our discussion: Q/E = q = A .f(k, h, i, r)  Where  k: Capital Stock  Investment in physical capital  h: Human Capital  Investment in people  i: Institutions  “Economic productivity strongly influenced by the fundamental structure of economic organisations”  r: (natural) Resources  harnessing our natural resources  A: Technology  central to the process of growth! What drives Productivity Growth?  To frame our discussion:     Q/E = q = A .f(k, h, i, r) Can you think of an example of each and how they impact on growth? Are these factors finite in their impact ? What about the relationship between these factors – are they separable? Refer to Irish Experience G1 (iii)  How would you briefly describe the Irish growth experience in the last 20 years and what are the prospects for future growth in Ireland would you argue?  Describe Irish growth experience in the last 20 years  What are the prospects for future growth in Ireland? Describe the Irish growth Experience in last 20 years  1995-2015: May be useful to divide this into different time periods – i.e. 1995-2007, 2008-2015  Key feature of Irish growth experience: Openness  Some examples of openness?  Important factors:  Role of the US Economy  Tax Rate  English Language  Single European Market – Ireland’s Position  Attitudes What are the prospects for future growth in Ireland?  Give your opinions – but balance with informed reasoning  Good Starting Point: We are a small open economy  Therefore Internal Factors important  But important consideration needs to be given to External Factors  What might we include in both categories that may impact growth going forward?  Both positives and negatives to consider  Examples? What does the EU think?  Note that this is a forecast! Some links!  http://www.irishtimes.com/news/world/europe/ireland-to     become-fastest-growing-eu-economy-1.2092466 http://www.esri.ie/irish_economy/consumer_sentiment/latest _consumer_sentiment/consumer-sentiment-improv/index.xml @Education_Ire (Twitter for Department of Education) http://www.ft.com/intl/cms/s/0/383e2724-ad14-11e4-a5c100144feab7de.html#axzz3QrUXmge2 http://www.irishtimes.com/business/economy/new-idastrategy-to-target-more-regional-jobs-1.2056382 http://www.irishtimes.com/business/economy/oecd-taxproposals-threaten-irish-deals-with-multinationals-1.2038794