T3 EC2020

Economy of Ireland
Tutorial 3 HT
Growth in Living Standards & Output
 My email: [email protected]
 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
Are these factors finite in their impact ?
What about the relationship between these factors – are they
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
 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
 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
@Education_Ire (Twitter for Department of Education)