On the causes of Ireland's unemployment

Abstract

This paper attempts to account for the rise in Irish unemployment between 1970 and 1987. To this end a fully articulated medium-term model of the economy is employed, in contrast to the four equation model of the labour market adopted by Newell and Symons (1990) in their recent study on the topic. The proximate causes identified in both cases include the swings in domestic fiscal policy, demographic factors, and the shocks which buffeted the world economy. Our conclusions differ quite sharply from theirs, however, and the reasons for these differences are explored.