The paper "Necessary Changes in Irish Society That Minimizes the Re-Occurrence of Economic Crisis" is a perfect example of a macro & microeconomics case study. Over the past decade, the economy of Irish society has been growing at a high until the year 2008 when it was hit by the global economic crisis. The financial crisis of 2008 slowed down the economic growth of Irish Society, thus causing it to have a high level of household debt as compared to disposable income. In Europe, Irish Society was the first nation to enter into a recession.
It is because of this that various studies have been done to determine how the re-occurrence of economic crises can be avoided in Irish society. This paper, therefore, utilizes economic concepts and the Solow growth model to explain the changes that are necessary for ensuring that the re-occurrence of economic crises, like the one being experienced in Irish society, is less likely. Necessary changes in Irish society that minimizes the re-occurrence of economic crisis In order to minimize the re-occurrence of the current crisis in Irish Society, several essential changes need to be done in such a way that they tackle the three elements of the Irish crisis.
The three elements of the Irish crisis entail banks’ financial crisis, the crisis of public finances and economic crisis. The main causes of the economic crisis in Irish were due to wage cuts within the private and public sectors, businesses running bankrupt and vast and rapid increase in unemployment. This, therefore, implies that in order to minimize the re-occurrence of economic crisis it is important to initiate changes that will ensure that wage cuts, businesses bankruptcy and high unemployment rate are no longer experienced in Irish society (Deshpande, 2010). The taxation system in Irish society should be changed so as to reduce the problem of wage cuts.
The current taxation system in Irish society does not provide a favorable investment climate. The created investment climate scares away potential investors and makes the already existing investments to underperform thus causing wages of workers to be reduced. Many organizations under this situation tend to reduce wages since the prevailing harsh taxation system normally makes them run bankrupt.
It is therefore important to introduce a new taxation system in Irish society that attracts and encourages investment development.
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