28 May, 2010

I'm no economist...

...but this graph of Ireland's growth (as a % of GDP) does not look good.

Yep, we're that dodgy-looking green line.

In the words of an acquaintance of mine, who is also an award-winning economist, "here is a good summary of the present situation".

1 comment:

rhiggs said...

From my previously mentioned economics-savvy acquaintance:

"That graph doesn't really explain things properly. Why? Because it states GDP, which includes the profits of multinationals (which don't increase Irish living standards). In Ireland it's more useful to measure GNP because it doesn't include multinational profits. GNP is only 85% of GDP. So Ireland's economy is considerable smaller than it is presented to be by the media. This GNP/GDP ratio in Ireland is very unique. Most countries in the world have figures roughly the same for both.

This graph shows a drop of 7.5%, when it has actually been a cumulative GNP drop of 17% or 18% thus far. This has been the biggest drop of any developed economy in the world since the great depression. It also ignores all the social costs and the breakdown of a functioning banking system needed to maintain a supply of credit so an economy can function. Credit is the economy's oxygen. Here is a depressing article for you from one of the only Irish economists that predicted the crisis. There was a lot of talk about this in the media this week.

I got told.