Macroeconomic Ireland Country Analysis

Topics: Republic of Ireland, Unemployment, Late-2000s recession Pages: 7 (3032 words) Published: September 5, 2013
The Republic of Ireland
. David Dougherty
EC 210 SP2013

Basic Facts and History
Ireland is an island nation located in northwestern Europe, west of the main land of England separated anywhere from 11 to 120 miles apart at different points. The island is divided into two parts, Northern Ireland, which is under British rule, and the Republic of Ireland. There are 32 counties in Ireland, 26 in the Republic and the rest in Northern Ireland. Dublin is the capital of the Republic of Ireland, which is located on the central east coast of the country. The country is a rich and bountiful basket of natural resources, such as peat copper, zinc, silver, barite, gypsum, limestone, and dolomite along with natural gas and petroleum. Key industries in Ireland include fishing, fish farming, livestock, mining, timber and agriculture which include wheat, barley, potatoes, sprouts, cabbages, cauliflowers, carrots and turnips. Manufactured goods include pharmaceuticals, medical devices, chemical production, computer hardware and software, food products, and beverages and brewing.

The Republic of Ireland is a free market economy with minimal government control. This sense of the economy very much mimics that of the United States, and as further evaluations and observations occur, it will be apparent that they are nearly identical in most regards. Ireland’s political system is a representative democracy. This form of government is founded on the concept of electing people of certain parties representing a group of people and their interests. Enda Kenny is the current Prime Minister of Ireland and has been an incumbent since 2002, while Michael D. Higgins resides as the president of Ireland and was elected in 2011.

Economic System
On the Demographic Transition Model (DTM), which gauges a country on their level of industrialization in regards with their percentage of birth and death rates and total population in a country, Ireland falls into stage 4, which means that they have a high total population and low and relatively even birth and death rates. This stage is defined as the most developed stage, in which a country has fully industrialized, which is what most developed economies fall under, including the United States. One of the problems with this stage is that it is quite frequent that birth rates will continue to fall below the replacement level leading to a shrinking population which is something of a threat to some industries that rely on a growing population. This then becomes a problem because there will eventually be a demand for a labor force and too many empty positions which will eventually shrink the economy as a whole. On the Human Development Index (HDI), which is a composite statistic which compiles life expectancy, education, and income index that ranks counties on the level of human development, Ireland ranks at .916 which goes into the tier of “very high”(IHDI, 2013). There are 4 tiers on the HDI, they are “very high”, high”, “medium” and “low”. Aside Ireland, the United States also fall into the “very high” category with a rating of .910. Ireland’s rating places them as the 7th highest rating in the world, following the United States at the 4th most developed. Purchasing Power Parity (PPP) is one of the economic theories that help articulate the value of currencies on an international level and in turn helps bridge the gaps between currency exchanges. This idea accumulates with other entities to help develop GDP. In relation to purchasing power of the US currency, Ireland has an 8% advantage among the international currency with the US at a base 0. According to the International Monetary Fund (IMF) on a breakdown of the worlds entire GDP per capita in relation to PPP in 2007 on the terms of international dollars, Ireland is one of the developed well off countries that annually generate 38,000 or more per capita....
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