Ashoka Mody: Folly of relying on a dubious recovery

The crisis is past, but the Irish recovery is still clouded by distorted statistics

Patrick Honohan was worried about the interpretation of both GDP and GNP statistics Pic:

Some unknown, but large part, of the “recovery” is based on Ireland’s now clearly unjustified corporate tax system. This is not good for Ireland’s friends and neighbours, and it is not good for Ireland.

In past years, thetax system attracted some long-term investment into Ireland and that helped propel the Celtic Tiger. It helped move the economy into high gear. Some part of the recovery from the crisis has been a continued dividend from that legacy. Aidan Regan of University College Dublin is surely right that the troika programme or the current government can claim no credit for beneficial legacy. Some will argue thatfiscal austerity helped regain market confidence and allowed the re-emergence of those historical advantages. Even that statement is not necessarily right: Greece did everything Ireland did and more, till it almost broke.