Ireland’s Recovery and Aftermath
The small county of Ireland has always had some ups and downs, but one of the greatest downturns, was during a very impacting period, were there was an economy downturn during the years 2008-2012, and after discussing the causes for that now we will discuss what the government of Ireland did to fix the situation, and if there method was effective or not. Ireland has had a long reputation as one of the poorest places in Europe. But in the country’s recent spectacular econonmy growth is making it harder to ignore.
According to “How Ireland pulled off an economic miracle that rivals China, India” by John Shmuel, posted on The Financial Post, “The Irish economy grew well to 7.8 per cent in 2015, making it well ahead of even big countries such as China and even India. But how did Ireland’s government pull this miracle off after suffering from a economic downturn?
What Ireland’s government did to fix the economy was that they fixed their GDP growth and utilized both the fiscal and the Monetary policies.
The Fiscal policy is when the government adjusts the spendings and tax rates to scan and crash a nation’s economy. This is exactly what Ireland’s government did to fix their economy. They lowered unemployment, boosted job growth and income. All this resulted in many Irish getting their jobs back and being able to afford their homes. Not only that but by using the fiscal policy Ireland lowered there tax rates and fixed the quantity of money spent.
So this led to the low economy growth to rise again and ballooning debt-to-GDP ratios that put them at risk of default had all been resolved so that the country of Ireland was no longer in debt because of loans. The government of Ireland used the monetary policiies to protect there price stability since they had lots of loans in there banks.
So what was the intended impact of the government policies? The objective and goals of the government policies was to adjusts its spending levels and tax rates to
make a better economy and turn everything back to normal. They also wanted to lower GDP because it was at a very high percentage that was affecting their economy. So thus, really what the goal of the government was, was anything that was affected during their economic downturn, to go back normal or even get better, because they owed it to their Irish people.
One of the most important policies in Ireland that was very impacting during this time was to not have no poverty. So the impact that this had was that there were jobs for everyone, and this method worked because the unemployment rate dropped and people with a job ratio increased meaning, there were less poor and there were many more who had jobs to feed themselves and their families. Having your poverty rate lowered in a country is one of the best impacts a country can ever have as it also increases economic growth and lowers GDP. So having and following the fiscal policy was a great method to use to change your economy.
Not only has the government policies impacted Ireland with there new success but according to “How Ireland pulled off an economic miracle that rivals China, India,” posted on The Financial Post, the author John Shmuel explains, “ But Ireland has also hugely benefited from the large number of foreign companies that have chosen it as a location for European expansion — mainly due to an incredibly low corporate tax rate of 12.5 per cent. The export-dominated economy has also been lifted by a low euro and a strong resumption of domestic demand from its once heavily indebted consumers.” So what John is really trying to say is that there were more than just policies that took part in the impact and aftermath of Ireland’s great economic comeback.
After Ireland had made one of the best turnarounds in there economy of course there methods were effective. Some people don’t believe how fast they fixed all of the debt they were in and how quickly GDP changed in a short period. Although Ireland’s GDP is not fully recovered they have done much better than where they were at 5 years before. Not only is there methods effective because of this but they were also effective because it saved Ireland from a huge debt, that they believed they could never payback. There were many other reasons why the government’s policies and methods were effective but the biggest reason for there method being effective is because they overcame and beat their economy downfall, which is very hard to do in a very short period of time.
Thus, even though ireland’s government and economic performance over the last four years has been more than impressive if judged by GDP growth and has fixed their economy, they still need to fix more problems that the downturn they suffered caused. Ireland can still make their economy stronger so that they have a smaller chance of suffering from a similar downturn ever again.