These Little PIIGS Went to Market: Enterprise Policy and Divergent Recovery in European Periphery

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Title: These Little PIIGS Went to Market: Enterprise Policy and Divergent Recovery in European Periphery
Authors: Brazys, Samuel
Regan, Aidan
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Date: 25-Aug-2015
Abstract: The 2008 financial crisis hit few places harder than the European periphery, where five states, Portugal, Italy, Ireland, Greece and Spain, came to be collectively known as the 'PIIGS'. Yet while the PIIGS experienced a similar adjustment to the crisis, the recoveries have shown significant divergence. Ireland, in particular, has stood out as a beacon of growth, not only in the PIIGS but in all of Europe. We challenge the prevailing narrative that Ireland’s exemplary performance is due to its early and ardent adaptation of fiscal 'austerity' measures. Instead we argue that Ireland’s path dependent, state-led, 'enterprise policy' situated Ireland to be a recipient of foreign direct investment driven by the low borrowing costs, brought on by the United States' Quantitative Easing (QE) programs. Using quantitative and qualitative investigation we find evidence that the latent enterprise policy mechanism – operationalized via the impact of QE on investment projects into Ireland (vis-à-vis the other PIIGS) - rather than increased wage competitiveness via austerity, accounts for Ireland’s recovery from the crisis.
Type of material: Working Paper
Publisher: University College Dublin. Geary Institute
Keywords: AusterityCrisisDebtIrelandPIIGSEnterprise Policy
Language: en
Status of Item: Not peer reviewed
Appears in Collections:Geary Institute Working Papers

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