Tuesday, July 21, 2015

Ireland Versus Greece

This article tries hard to show that Ireland has recovered faster than Greece because fiscal contraction (austerity) was much larger in Greece.  This explanation would make sense if standard macroeconomic analysis were applied to nations with similar economies.  The author of the article is a highly regarded economist and his readers are much more knowledgeable than the typical commentary class in the blogosphere.  The differences between Ireland are substantial.  Austerity has not been good for either of them, but the the differences in their economies, and in their political systems, overwhelm the effort made to put the blame on austerity using standard neo-liberal economic concepts.  The comments that follow this article illustrate the important differences between Ireland and Greece.  Ireland has done better than Greece but it has also suffered from the recession and the collapse of its banks.

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