Front Matter Page

© 2005 International Monetary Fund

October 2005

IMF Country Report No. 05/370

Ireland: Selected Issues

This Selected Issues paper for Ireland was prepared by a staff team of the International Monetary Fund as background documentation for the periodic consultation with the member country. It is based on the information available at the time it was completed on July 12, 2005. The views expressed in this document are those of the staff team and do not necessarily reflect the views of the government of Ireland or the Executive Board of the IMF.

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Front Matter Page

INTERNATIONAL MONETARY FUND

IRELAND

Selected Issues

Prepared by Keiko Honjo, Dora Iakova, and Marialuz Moreno-Badia (all EUR)

Approved by European Department

July 12, 2005

Contents

• I. Favorable Fiscal Outturns: Is it Just the Luck of the Irish?

  • A. Introduction

  • B. Methodology

  • C. International Comparison of Forecast Accuracy

  • D. Characteristics of the Forecast Errors in Ireland

  • E. Institutional Environment

  • F. Concluding Remarks

• Box

• 1. Key Elements of the Institutional Framework

• Figures

• 1. Forecast Errors for Macroeconomic Projections

• 2. Revenue Forecast Errors

• Tables

• 1. Descriptive Statistics of Macroeconomic Forecast Errors, 1991–2003

• 2. Macroeconomic Projections: Results of Bias and Efficiency Tests

• 3. Forecast Errors: 1992–2003

• 4. Descriptive Statistics of One-Year Budget Forecast Errors: 1991–2003

• 5. Fiscal Forecasts: Results of Bias and Efficiency Tests

• References

• Appendix

• I. Data Sources and Definitions

• II. The Evolution of Unemployment in Ireland: The Role of Labor Market Policies

  • A. Introduction

  • B. Cyclical Versus Structural Unemployment

  • C. The Evolution of Labor Market Institutions in Ireland

  • D. Empirical Evaluation of the Role of Institutions

  • E. Concluding Remarks

• Figure

• 1. Changes in the Unemployment Rate in Ireland

• References

• Appendix

• I. Data Sources and Definitions

• III. Who Saves in Ireland? The Micro Evidence

  • A. Introduction

  • B. Who Saves in Ireland?

  • C. Are Household Savings Affected by Capital Gains in Housing?

  • D. The Special Savings Incentive Accounts

  • E. Concluding Remarks

• Figures

• 1. International Comparisons: Household Saving Rates

• 2. Income, Consumption and Life-Cycle Saving

• 3. Median Weekly Household Income by Cohort and Age

• 4. Median Weekly Household Expenditure by Cohort and Age

• 5. Median Weekly Household Savings by Cohort and Age

• 6. Median Household Savings Ratio by Cohort and Age

• 7. Median Saving Ratio by Cohort and Age

• Tables

• 1. Household Savings Rates, 1994/95 and 1999/2000

• 2. Cohort Definitions and Cell Size

• 3. Median Savings Ratio by Income Quartile, HBS 1999/2000

• 4. Median Savings Ratio by Education and Income Quartiles, HBS 1999/2000

• 5. Median Savings Ratio by Assets Ownership

• 6. Median Savings Ratio by Tenure and Income Quartiles, HBS 1999/2000

• 7. Median Regression Results

• 8. SSIA Aggregate Subscriptions and Tax Credits

• 9. Distribution of Savings Across Age Groups

• References

• Appendices

• I. Data Sources and Definitions

• II. Median Cohort Regression