They began to become open to the global market and began trading. They also had a low tax rate (corporate tax rate). This attracted many people to build their businesses in Ireland. Ireland also began to invest in their education more.
2. What factors attributed to the rapid decline in thea Irish Economy?
The decline happened because, with their newfound money, many people in Ireland began to spend..and spend A LOT of their money (expensive restaurant, helicopters etc.). Many bought property, such as hotels. Also, house prices rose extensively. The Irish banks started to loan out tons of money. The Irish government failed to regulate the banks despite several warnings. This created a chain reaction. When the Irish people lost money, the banks didn't have enough money to loan out. Soon the government was bankrupt. :(
3a. 1950-1990
During the 1950's-1990's, Ireland was basically an agriculturally based economy. They didn't trade with other countries around the world. Because of this, they developed slower than other West European countries. During the worldwide recession in the 1980's Ireland had high unemployment. They soon began to flourish, though, during their "Celtic Tiger" phase. America during the 1950's, however, was doing really well while trading with other countries around the world.
3b. 1990-2007
During this time, Ireland was becoming a "Celtic Tiger." As unemployment began to decrease businesses started to flock over, Ireland was thriving. Although not many knew, there were signs that this "Celtic Tiger" phase was not going to last. Anyways, Ireland had one of the highest GDPs. During this period, many migrated into Ireland because of low tax rates (corporate). Ireland's unemployment rate was also very low. For America, in the early 1990's, they were facing a recession.
3c. 2007-2012
Since 2007, the Ireland's GDP has fallen from over 180 Euro billion to less than 160 Euro billion. Residential property prices have also decreased substantially since 2007. America has also not been that well. The US debt has increased substantially (citizens). There has also been a loss in wealth.
4. Please develop three curiosities about the Irish or international economy.
- How come the wealthy Irish people spend all their money instead of saving it?
- Will a nation's economy always crash when they are on a high like Ireland was during their "Celtic Tiger" phase?
- Why isn't Ireland still not able to build itself back up again like they did before?
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