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Competitiveness and wages in the Eurozone

POSTED ON August 16th  - POSTED IN Labour & Wages
From rippedoffbritons.com

From rippedoffbritons.com

Martin Sandbu has a useful piece in the Financial Times entitled Free Lunch: getting real about competitiveness. It makes many points that we regularly make here: most fundamentally, that we should not confuse the competitiveness of companies with the so-called ‘competitiveness’ of countries. (To get a first sense of this, ponder the difference between a failed company and a failed state.)

Sandbu’s focus is not on ‘tax competitiveness‘ or on the ‘competitiveness’ of a country’s financial sector policies, but on exchange rate and wage issues, and the Eurozone. He describes the ‘conventional wisdom’ going like this: countries in the Eurozone with large trade deficits cannot adjust their currencies so they have to restore ‘competitiveness’ by driving down wages. Then he sets about challenging the conventional wisdom, on several fronts.

Wages and national competitiveness: getting real

POSTED ON August 16th  - POSTED IN Labour & Wages
From rippedoffbritons.com

From rippedoffbritons.com

Martin Sandbu has a useful piece in the Financial Times entitled Free Lunch: getting real about competitiveness. It makes many points that we regularly make here: most fundamentally, that we should not confuse the competitiveness of companies with the so-called ‘competitiveness’ of countries. (To get a first sense of this, ponder the difference between a failed company and a failed state.)

Sandbu’s focus is not on ‘tax competitiveness‘ or on the ‘competitiveness’ of a country’s financial sector policies, but on exchange rate and wage issues, and the Eurozone. He describes the ‘conventional wisdom’ going like this: countries in the Eurozone with large trade deficits cannot adjust their currencies so they have to restore ‘competitiveness’ by driving down wages. Then he sets about challenging the conventional wisdom, on several fronts.

Did Ireland’s 12.5 percent corporate tax rate create the Celtic Tiger?

POSTED ON March 10th  - POSTED IN Blog, Tax

Did Ireland’s 12.5 percent corporate tax rate create the Celtic Tiger?

Ireland has long been a poster child for corporate tax-cutting. The standard argument goes something like this. “Ireland has very low corporate taxes . . . Celtic Tiger . . . just goes to show that corporate tax cuts grow your economy.” This argument is popular in Ireland too where government officials like to call the flagship 12.5 percent corporate income tax rate a “cornerstone” of industrial policy.

But is any of this even true?

Well, now take a look at this little graph that we created for this blog. We aren’t aware that a graph like this has been made before.

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