The Celtic Tiger in historical and international perspective

When Economic Development was published in 1958 there was good reason to worry both about Ireland's economic performance and its economic prospects. While most western European countries were enjoying rapid economic growth Ireland was falling well behind the leaders. With an industrial−relations structure based on strong but de-centralized collective bargaining, Ireland was not in a position to follow the corporatist path to rapid catch-up growth based on wage restraint in return for high investment which prevailed in much of Europe. As a small, inefficient, and still quite agricultural economy on the periphery, there were good reasons to fear the consequences of moves to free trade within Europe

Creating competitive advantage : policy lessons from history

This paper reviews selected aspects of the history of UK supply-side policy in terms of their productivity implications. An important change after the 1970s which improved productivity performance was the adoption of policies to end protectionism and strengthen competition. A review of horizontal industrial policies shows weaknesses in education, infrastructure, taxation and, especially, land-use planning but, on the positive side, a regulatory stance conducive to the rapid adoption of ICT. A big implication is that any return to a more active industrial policy should be designed to minimize adverse effects on competition

Western Europe’s growth prospects : an historical perspective

This paper surveys the recent history of Western European growth. It concludes that this experience has been disappointing and that further reforms are desirable in many countries. The requirement for reform comes both from achieving ‘close-to-frontier’ status and from the opportunities provided by the new technological era. The paper goes on to consider the effects that the current crisis may have on medium-term growth rates. The lesson from the 1930s is that, if the current crisis leads to a similarly bad downturn, the policy reaction in terms of greater state intervention will not be conducive to improved growth prospects

UK defence news, 1920-1938 : estimates based on contemporary sources

This paper employs the concept of ‘defence news’ proposed by Ramey (2009) to develop a time series of shocks to UK defence spending in the interwar period at a quarterly frequency. ‘Defence news’ is the present value of changes to defence spending plans. Information on this is taken from contemporary sources, in particular, The Economist. The estimates in this paper can be used as an input to assessing the size of the fiscal multiplier in interwar Britain as in Crafts and Mills (2012)

What does the 1930s’ experience tell us about the future of the Eurozone?

If the Eurozone follows the precedent of the 1930s, it will not survive. The attractions of escaping from the gold standard then were massive and they point to a strategy of devalue and default for today’s crisis countries. A fully-federal Europe with a banking union and a fiscal union is the best solution to this problem but is politically infeasible. However, it may be possible to underpin the Euro by a ‘Bretton-Woods compromise’ that accepts a retreat from some aspects of deep economic integration since exit entails new risks of financial crisis that were not present eighty years ago

Industrial policy for the medium to long-term

This report reviews the market failure and systems failure rationales for industrial policy and assesses the evidence on part experience of industrial policy in the UK. In the light of this, it reviews options for reshaping the design and delivery of industrial policy towards UK manufacturing. These options are intended to encourage a medium- to long-term perspective across government departments and to integrate science, innovation and industrial policy

Geography and intra-national home bias : U.S. domestic trade in 1949 and 2007

This paper examines home bias in U.S. domestic trade in 1949 and 2007. We use a unique data set of 1949 carload waybill statistics produced by the Interstate Commerce Commission, and 2007 Commodity Flow Survey data. The results show that home bias was considerably smaller in 1949 than in 2007 and that home bias in 1949 was even negative for several commodities. We argue that the difference between the geographical distribution of the manufacturing activities in 1949 and that of 2007 is an important factor explaining the differences in the magnitudes of home-bias estimates in those years

The location of the UK cotton textiles industry in 1838 : a quantitative analysis

We examine the geography of cotton textiles in Britain in 1838 to test claims about why the industry came to be so heavily concentrated in Lancashire. Our analysis considers both first and second nature aspects of geography including the availability of water power, humidity, coal prices, market access and sunk costs. We show that some of these characteristics have substantial explanatory power. Moreover, we exploit the change from water to steam power to show that the persistent effect of first nature characteristics on industry location can be explained by a combination of sunk costs and agglomeration effects

Making sense of the manufacturing belt : determinants of U.S. industrial location, 1880-1920

This paper investigates the ability of the new economic geography to explain the persistence of the manufacturing belt in the United States around the turn of the 20th century using a model which subsumes both market-potential and factor-endowment arguments. The results show that market potential was central to the existence of the manufacturing belt, that it mattered more than factor endowments, and that its impact came through interactions both with scale economies and with linkage effects. Natural advantage played a role in industrial location but only through agricultural inputs which were important for a small subset of manufacturing

Fiscal policy in a depressed economy : was there a ‘free lunch’ in 1930s’ Britain?

We report estimates of the fiscal multiplier for interwar Britain based on quarterly data and timeseries econometrics. We find that the government-expenditure multiplier was in the range 0.3 to 0.9 even during the period that interest rates were at the lower bound. The scope for a ‘Keynesian solution’to recession was much less than is generally supposed. In the later 1930s but not before Britain’s exit from the gold standard, there was a ‘fiscal free lunch’in that deficit-financed government spending would have improved public finances enough to pay for the interest on the extra debt