Industrial policy, employment policy and the non-traded sector

Abstract

This paper will critically examine the assumptions on which their [Irish policy makers] policies have been based, and suggest a more constructive role for government intervention. There are three quite distinct sections. The first section will outline the traditional theoretical basis for Irish government policy, and ask whether it makes sense. The second section argues that the non-traded sector is the key to a country's competitiveness. The third section will investigate the effects on the Irish economy of opening up sectors, hitherto nontraded (due to government restrictions), to foreign competition. In particular, the employment effects of such a move are examined, using a computable general equilibrium model developed by the author, in collaboration with Kevin Denny and Aoife Hannan of UCD.