The paper "Irish Economic Growth" is a perfect example of a macro & microeconomics case study. According to Robert Solow, economic growth will require an increase in per capita income, and political and social institutions necessary to support an expansion of the national economy (Solow 1957). It also requires people in that particular country to produce goods and services at higher rates. In addition, to an increase per capita income, it also includes changes in the structure of the economy. These changes are characterized by industrial sector growth and a decline in agriculture share of GDP (Gross Domestic Product) as well as changes in employment opportunities, rural to urban migration and population growth (Solow and Temin 1978). Basic Economic Growth Model According to the Solow Growth Model, the primary factors of economic growth are labor and capital.
At a national level, a production function can be represented by the formula Y= F (K, L) where Y represents output, and L and K represent labor and capital respectively. An Increase in Y (output) depends on an increase in L (labor supply) through population growth and an increase in K (capital stock) through investment (Solow and Temin 1978).
In addition, capital investment will depend on savings while labor supply will be based on demographics. When labor and capital increase, the economy will grow (Solow 1957). Ireland (The Celtic Tiger) case period of the mid- the too late 1990s saw the Ireland economy having a double-digit GDP growth” (Honohan 2009), which was driven by industrial policies that we're able to boost exports and large-scale foreign direct investment into the country. Ireland's GDP growth dipped during the economic slowdown but averaged roughly 5 per cent annually between 2004 and 2007, which was the best performance among the European Union (EU) 15 member states.
During the same period, the Irish economy was able to generate approximately 90,000 new jobs yearly and attracted over 250,000 foreign workers, mostly from the new European Union (EU) member states (Honohan and Walsh 2002). In an unavoidable foreign worker influx into Ireland, the construction sector contributed to approximately one-quarter of these new jobs. However, during the economic recession in 2008, the Irish economy started experiencing a slowdown.
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