Click here for search results
Explaining the last consumption boom-bust cyclein Ireland : the role of news and noise shocks, Volume 1
 
Author:Diaz Sanchez, Jose Luis; Country:Ireland;
Date Stored:2013/06/28Document Date:2013/06/01
Document Type:Policy Research Working PaperSubTopics:Economic Theory & Research; Knowledge for Development; Labor Policies; Consumption; E-Business
Language:EnglishRegion:Europe and Central Asia
Report Number:WPS6525Collection Title:Policy Research working paper ; no. WPS 6525
Volume No:1  

Summary: The objective of the paper is to explain the last boom and bust in consumption in Ireland by the failure of consumers to correctly distinguish permanent changes in productivity from temporary changes. It uses a business cycle model, where agents update their beliefs about long-run productivity using information -that they receive continuously- about the future state of the economy. The analysis finds that a large and prolonged disconnect between consumption and long-run productivity occurred in the years leading to the economic crisis, which led to -- over-consumption -- for several quarters. A strong downward adjustment in 2008 followed when Irish consumers finally realized their mistake.

Official Documents
Official, scanned versions of documents (may include signatures, etc.)
File TypeDescriptionFile Size (mb)
PDF 10 pagesOfficial version*0.7 (approx.)
TextText version**
How To Order

* The official version is derived from scanning the final, paper copy of the document and is the official,
archived version including all signatures, charts, etc.
** The text version is the OCR text of the final scanned version and is not an accurate representation of the final text.
It is provided solely to benefit users with slow connectivity.



Permanent URL for this page: http://go.worldbank.org/GJNN73GWJ0