Ireland is Officially In Depression

[johnfás]

People generally think of the great depression in the 1930s in the states. We are no where near that level of poverty .

That brings you into absolute versus relative value though... which is a whole other kettle of fish.

[toughbutfair]

That brings you into absolute versus relative value though... which is a whole other kettle of fish.

I never pay attention to relative values, If I only had 1 Ferrari and everybody else had 2, I'd be in relative poverty. A pile of PC krap!

Nobody in Ireland is poor - I've seen pictures of my fathers childhood 1930s Limerick, no shoes, sewage running down streets etc. People today are wimps.

[Cassandra Syndrome]

Technically we are not even in recession.

I just read on rte that Q3 grew .3% compared to Q2.

RTE? They only way they could interpret the data like that would be on page 6

Table 4 Gross Value Added at Constant Factor Cost by Sector of Origin and Gross National Product at Constant
Market Prices (Chain linked annually and referenced to year 2007) - Seasonally Adjusted

which is down to as quoted by the CSO,

The seasonally adjusted estimates show that for Q3 2009, compared with the
previous quarter, there was a small increase in GDP of 0.3 per cent while GNP
declined by 1.4 per cent.
The expenditure components had decreases in personal consumption, capital
formation, government expenditure and exports but also had a lower level of
imported goods and services resulting in a small increase in GDP.

These figures are terrible. The driver behind recovery, Private Investment is down 60%.

[johnfás]

I never pay attention to relative values, If I only had 1 Ferrari and everybody else had 2, I'd be in relative poverty. A pile of PC krap!

Nobody in Ireland is poor - I've seen pictures of my fathers childhood 1930s Limerick, no shoes, sewage running down streets etc. People today are wimps.

In respect of poverty, perhaps. But are you saying that the recession/depression distinction should be made by reference only to absolute values or should there be a definition of depression which is contingent on a degree of relative decline?

[toughbutfair]

I would generally use recession for economy sliding and depression for absolute level of weath. Not technical I know, but we are hardly poverty stricken so I wouldn't call this a depression.

Anyway, technically a recession is when GDP is decreasing but q3 increased from q2. RTE had the heading as "Ireland technically out of recession" but the fear of good news obviously got the better as within 5 minutes they changed it to "economy still weak".

What basstards!

[toughbutfair]

Cassandra - don't economists nearly always say recession is when GDP declines 2 quarters running? so technically we aren't in one anymore.

Don't get me wrong - I don't believe in formulas. I view it in simple terms, when jobs are being lossed more than created, and people's level of wealth is decreasing, then we are in recession regardless of GDP movements.

[johnfás]

Does the official recession measure (which is 2 Q's of negative growth, isn't it?) take into account broken trends. For example a period of 9 Q's where you have 2 negative, 1 positive, 2 negative, 1 positive, 2 negative, when you get your 1 positive in Q9 are you officially out of recession? :-P

[toughbutfair]

Does the official recession measure (which is 2 Q's of negative growth, isn't it?) take into account broken trends. For example a period of 9 Q's where you have 2 negative, 1 positive, 2 negative, 1 positive, 2 negative, when you get your 1 positive in Q9 are you officially out of recession? :-P

I think you would be deemed to be out of it.

[Scorpio]

Whether we're in recession/depression as measured by GDP/GNP is certainly a standard way but can be a bit abstract. Jobs are that bit more real. This is worth a read for a good comparison of Ireland now versus USA now/USA in the 1930s:
Is Ireland in a jobs recession or a jobs depression? | Ronan Lyons

It includes an instructive graph of private sector job losses:

[He3]

I think you would be deemed to be out of it.

Technically, given that the definition of recession is two quarters in a row of falling GDP, this means that Ireland has now exited recession.

However, at a press conference earlier today, assistant director general of the CSO Bill Keating refused to call an end to the recession, pointing out that much of the rise in GDP was attributed to profits from multinationals based in Ireland.

Whether Ireland was out of recession or not was " a matter of semantics", Mr Keating said.

"The general picture shows that on a seasonally adjusted basis there is a levelling off in GDP but GNP continues to decline, albeit at a slower pace than it has in previous quarters. Contributing to the GDP increase in a fairly major way was growth in the multinational sector," he added.


PS there are two threads on this