EU: In 2011, Bulgaria was the "poorest" member, Luxembourg the "richest"

[Tender Branson]

Here's a map from the "Standard" newspaper:



http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/2-20062012-AP/EN/2-20062012-AP-EN.PDF

With how the economy is going this year here and in the Netherlands, we might actually overtake the Dutch and become 2nd in 2012.

[Tender Branson]

An explanation on why Luxembourg does so well:

The high GDP per capita in Luxembourg is partly due to the country's large share of cross border workers in total employment. While contributing to GDP, these workers are not taken into consideration as part of the resident population which is used to calculate GDP per capita.

[politicus]

Strange that Ireland is that high.

[Supersonic]

No way is Ireland that high.

[Јas]

Strange that Ireland is that high.

No way is Ireland that high.

The ratio used to be quite a bit higher still.

If you're going to accuse the Irish Central Statistics Office or Eurostat of fiddling the numbers, I'd be interested to see the evidence to support your contention.

[Tender Branson]

Ireland still has a GDP-bonus from the good years between 1995 and 2007.

Only after that Ireland's economy went down and so did the per-capita GDP.

[bore]

Could Ireland's high figure be due to lots of businesses being there due to the comparitively low tax rates, as opposed to actual living standards?

[Јas]

Could Ireland's high figure be due to lots of businesses being there due to the comparitively low tax rates, as opposed to actual living standards?

Since when did GDP per capita constitute a good measure of actual living standards?

[politicus]

Strange that Ireland is that high.

No way is Ireland that high.

The ratio used to be quite a bit higher still.

If you're going to accuse the Irish Central Statistics Office or Eurostat of fiddling the numbers, I'd be interested to see the evidence to support your contention.

I certainly didnt accuse anyone of "fiddling" the numbers, just said it was strange. I would never have expected Ireland to have a higher GDP than Scandinavian countries or Germany.

Whats the explanation? Uneven income distribution or..?

[bore]

Could Ireland's high figure be due to lots of businesses being there due to the comparitively low tax rates, as opposed to actual living standards?

Since when did GDP per capita constitute a good measure of actual living standards?

Since never, I was just suggesting a reason as to why Ireland's was much higher than other similar countries.

[Јas]

Strange that Ireland is that high.

No way is Ireland that high.

The ratio used to be quite a bit higher still.

If you're going to accuse the Irish Central Statistics Office or Eurostat of fiddling the numbers, I'd be interested to see the evidence to support your contention.

I certainly didnt accuse anyone of "fiddling" the numbers, just said it was strange. I would never have expected Ireland to have a higher GDP than Scandinavian countries or Germany.

Why not?

Whats the explanation? Uneven income distribution or..?

Uneven income distribution correlates more strongly with lower gdp per capita than higher (see here).

For what it's worth, Ireland's income distribution is more even than Germany's (though more uneven than in Scandinavian). It's essentially the same as France. (Per OECD)

[Foucaulf]

Surprised no one has commented that Ireland, Italy, Spain, Portugal and Greece have higher GDP per capitas than Estonia, the latest poster child for austerity or something. Maybe the point is too subtle.

[Gustaf]

Surprised no one has commented that Ireland, Italy, Spain, Portugal and Greece have higher GDP per capitas than Estonia, the latest poster child for austerity or something. Maybe the point is too subtle.

I'm surprised that you seem unaware of that being true before the crisis hit. There was this thing called the USSR that played a part. Maybe that is too subtle.

GDP per capita is a decent proxy for standards of living for most countries, but it works poorly in some cases. Luxembourg is a bank account, not a nation. Ireland, I think, has a lot of companies placing branches there for tax reasons. That money might not benefit the average citizen all that much. How does Ireland's GNI look?

[Јas]

Ireland, I think, has a lot of companies placing branches there for tax reasons. That money might not benefit the average citizen all that much.

Foreign Direct Investment companies are responsible for around 130,000 jobs (directly) in Ireland. They also generate significant tax earnings for the State. These factors are of both of benefit to ordinary citizens.

How does Ireland's GNI look?

Per the World Bank database, below is the 2010 data (latest available) on GNI per capita for the OECD nations (though they don't have the figures for New Zealand yet):

87350   Norway
76980   Luxembourg
71520   Switzerland
59400   Denmark
50100   Sweden
49030   Netherlands
47570   Finland
47340   United States
47030   Austria
46200   Australia
45840   Belgium
43250   Canada
43070   Germany
42370   France
41850   Japan
41820  Ireland
38200   United Kingdom
35700   Italy
32640   Iceland
31750   Spain
27180   Israel
26950   Greece
23900   Slovenia
21870   Portugal
19890   Korea, Rep.
17890   Czech Republic
16840   Slovak Republic
14460   Estonia
12860   Hungary
12440   Poland


One suspects we can agree that even GNI per capita is an unsatisfactory approximation for living standards if it suggests that Norwegians have twice the living standard of the French; the Danes three times the living standards of South Koreans; and the Dutch twice the living standards of the Israelis.

[Foucaulf]

I'm surprised that you seem unaware of that being true before the crisis hit. There was this thing called the USSR that played a part. Maybe that is too subtle.

I meant those in the topic who were surprised at Ireland's GDP should have commented on the Estonia thing instead. I personally believe in the slightly less absurd hypothesis that Estonians tough out their wage freezes because of their going through the Soviets.

I made a chart comparing the GNI per capita of Ireland versus a bunch of others, by the way. Irish GNI growth also lagged behind GDP growth by around 1%.

[Gustaf]

Ireland, I think, has a lot of companies placing branches there for tax reasons. That money might not benefit the average citizen all that much.

Foreign Direct Investment companies are responsible for around 130,000 jobs (directly) in Ireland. They also generate significant tax earnings for the State. These factors are of both of benefit to ordinary citizens.

How does Ireland's GNI look?

Per the World Bank database, below is the 2010 data (latest available) on GNI per capita for the OECD nations (though they don't have the figures for New Zealand yet):

87350   Norway
76980   Luxembourg
71520   Switzerland
59400   Denmark
50100   Sweden
49030   Netherlands
47570   Finland
47340   United States
47030   Austria
46200   Australia
45840   Belgium
43250   Canada
43070   Germany
42370   France
41850   Japan
41820  Ireland
38200   United Kingdom
35700   Italy
32640   Iceland
31750   Spain
27180   Israel
26950   Greece
23900   Slovenia
21870   Portugal
19890   Korea, Rep.
17890   Czech Republic
16840   Slovak Republic
14460   Estonia
12860   Hungary
12440   Poland


One suspects we can agree that even GNI per capita is an unsatisfactory approximation for living standards if it suggests that Norwegians have twice the living standard of the French; the Danes three times the living standards of South Koreans; and the Dutch twice the living standards of the Israelis.

Oh, you misunderstand me. I know economics, I certainly don't think that FDI does not benefit Ireland. What I meant was some of it is of a nature which might boost GDP somewhat artificially. Isn't Facebook's European headquarters located in Ireland for example? How much of the money brought in by that office (contributing to Ireland's GDP) actually contributes to Ireland? I'd guess a large chunk of it does not. This does not mean that it doesn't benefit Ireland, merely that the benefit does not reflect the size of the GDP contribution.

This seems backed up by the GNI figures. As you see, Ireland is below most of Western Europe on that measure, indicating that a lot of the money earned in Ireland does not go to Irish people.

And when it comes to inequality, at least what I would mean, is that given a certain GDP level what we think of as standard of living will be lower if inequality is higher. When people are surprised at Ireland having such high GDP this may be based on their impression of meeting Irish people (or just plain ignorance, of course! ). If there are a few really rich people driving up the average GDP, there can be a mismatch between how rich a country seems to us and what it's GDP per capita is. Brunei or Equatorial Guinea are good examples of this taken to the extreme.

In fact, even the US works. I'd wager that a median income earner in Sweden would seem to enjoy a higher standard of living than all those Americans living in trailers in Mississippi. US GDP per capita is partly higher simply because the really rich in the US drives up the average a lot.

And before someone jumps on this I'm not saying that's the whole explanation in that case either.

[Gustaf]

I'm surprised that you seem unaware of that being true before the crisis hit. There was this thing called the USSR that played a part. Maybe that is too subtle.

I meant those in the topic who were surprised at Ireland's GDP should have commented on the Estonia thing instead. I personally believe in the slightly less absurd hypothesis that Estonians tough out their wage freezes because of their going through the Soviets.

I made a chart comparing the GNI per capita of Ireland versus a bunch of others, by the way. Irish GNI growth also lagged behind GDP growth by around 1%.

Maybe your point is too subtle because I'm confused as to what it is now.

It is probably true that Estonians are more willing to deal with tough times than Southern Europeans. Why should that lead to us being surprised at them having a low GDP per capita?

[Jack Vance RIP]

I know economics,

I admit it. I actually LOLed. Not because I disagree, but because of how arrogant it sounded.

[Јas]

Oh, you misunderstand me. I know economics, I certainly don't think that FDI does not benefit Ireland. What I meant was some of it is of a nature which might boost GDP somewhat artificially. Isn't Facebook's European headquarters located in Ireland for example? How much of the money brought in by that office (contributing to Ireland's GDP) actually contributes to Ireland? I'd guess a large chunk of it does not. This does not mean that it doesn't benefit Ireland, merely that the benefit does not reflect the size of the GDP contribution.

Indeed, Facebook's European HQ is in Dublin. They employ around 400 people (a third of whom reportedly earned six-figure windfalls from the recent flotation). The subsidiary reported a pre-tax profit of €1.9m in 2010 (I'm not sure though exactly how much was actually paid in tax.).

The presence of Facebook in Dublin helps Ireland's status as a technology and ICT hub - as does the presence of the European bases of Google, Microsoft, IBM, twitter, Yahoo, Paypal and others.

Whether these matters are significant is in the eye of the beholder of course.

This seems backed up by the GNI figures. As you see, Ireland is below most of Western Europe on that measure, indicating that a lot of the money earned in Ireland does not go to Irish people.

True. But then if we didn't have a low corporate tax rate to help attract the various tech companies and the various other MNCs operating in Ireland - the country might surely be substantially worse off in terms of the employment (possibly also the quality of employment) and tax receipts - and quite probably in its GDP and GNI and other such indicators.

And when it comes to inequality, at least what I would mean, is that given a certain GDP level what we think of as standard of living will be lower if inequality is higher. When people are surprised at Ireland having such high GDP this may be based on their impression of meeting Irish people (or just plain ignorance, of course! ). If there are a few really rich people driving up the average GDP, there can be a mismatch between how rich a country seems to us and what it's GDP per capita is. Brunei or Equatorial Guinea are good examples of this taken to the extreme.

In fact, even the US works. I'd wager that a median income earner in Sweden would seem to enjoy a higher standard of living than all those Americans living in trailers in Mississippi. US GDP per capita is partly higher simply because the really rich in the US drives up the average a lot.

Yeah, as I said earlier, GDP per capita is not a particularly great approximation of "average living standards" (whatever that really means). Too make an assessment of that, I'd have thought that data on average wages/median household incomes; on quality of education, healthcare, etc.; and other matters would be more important.

[Gustaf]

I know economics,

I admit it. I actually LOLed. Not because I disagree, but because of how arrogant it sounded.

Well, in order to not think that FDI benefits a country one must be at a very, very low level of understanding. The sentence is supposed to be the equivalent of "I know physics, I don't think objects fall faster if they have more mass."

It doesn't imply that I know everything there is to know about economics, because I obviously don't.

[Gustaf]

Oh, you misunderstand me. I know economics, I certainly don't think that FDI does not benefit Ireland. What I meant was some of it is of a nature which might boost GDP somewhat artificially. Isn't Facebook's European headquarters located in Ireland for example? How much of the money brought in by that office (contributing to Ireland's GDP) actually contributes to Ireland? I'd guess a large chunk of it does not. This does not mean that it doesn't benefit Ireland, merely that the benefit does not reflect the size of the GDP contribution.

Indeed, Facebook's European HQ is in Dublin. They employ around 400 people (a third of whom reportedly earned six-figure windfalls from the recent flotation). The subsidiary reported a pre-tax profit of €1.9m in 2010 (I'm not sure though exactly how much was actually paid in tax.).

The presence of Facebook in Dublin helps Ireland's status as a technology and ICT hub - as does the presence of the European bases of Google, Microsoft, IBM, twitter, Yahoo, Paypal and others.

Whether these matters are significant is in the eye of the beholder of course.

This seems backed up by the GNI figures. As you see, Ireland is below most of Western Europe on that measure, indicating that a lot of the money earned in Ireland does not go to Irish people.

True. But then if we didn't have a low corporate tax rate to help attract the various tech companies and the various other MNCs operating in Ireland - the country might surely be substantially worse off in terms of the employment (possibly also the quality of employment) and tax receipts - and quite probably in its GDP and GNI and other such indicators.

And when it comes to inequality, at least what I would mean, is that given a certain GDP level what we think of as standard of living will be lower if inequality is higher. When people are surprised at Ireland having such high GDP this may be based on their impression of meeting Irish people (or just plain ignorance, of course! ). If there are a few really rich people driving up the average GDP, there can be a mismatch between how rich a country seems to us and what it's GDP per capita is. Brunei or Equatorial Guinea are good examples of this taken to the extreme.

In fact, even the US works. I'd wager that a median income earner in Sweden would seem to enjoy a higher standard of living than all those Americans living in trailers in Mississippi. US GDP per capita is partly higher simply because the really rich in the US drives up the average a lot.

Yeah, as I said earlier, GDP per capita is not a particularly great approximation of "average living standards" (whatever that really means). Too make an assessment of that, I'd have thought that data on average wages/median household incomes; on quality of education, healthcare, etc.; and other matters would be more important.

We seem to still be talking past each other. I'm not denying that Ireland benefits from these things nor am I suggesting they should change their policy. I'm merely saying that I suspect it inflates GDP to a level that does not reflect the actual standard of living in Ireland.

This helps explain peoples' surprise at Ireland's figures, that's all.

[Jack Vance RIP]

I know economics,

I admit it. I actually LOLed. Not because I disagree, but because of how arrogant it sounded.

Well, in order to not think that FDI benefits a country one must be at a very, very low level of understanding. The sentence is supposed to be the equivalent of "I know physics, I don't think objects fall faster if they have more mass."

It doesn't imply that I know everything there is to know about economics, because I obviously don't.

Which only makes you look more foolish...

[Gustaf]

I know economics,

I admit it. I actually LOLed. Not because I disagree, but because of how arrogant it sounded.

Well, in order to not think that FDI benefits a country one must be at a very, very low level of understanding. The sentence is supposed to be the equivalent of "I know physics, I don't think objects fall faster if they have more mass."

It doesn't imply that I know everything there is to know about economics, because I obviously don't.

Which only makes you look more foolish...

Eh, ok. I don't think clearing up a misunderstanding is such a big deal but it seems to give you comfort to attack me a lot, especially on subjects you don't know very well, so...have fun with that, I guess?

[Jack Vance RIP]

I know economics,

I admit it. I actually LOLed. Not because I disagree, but because of how arrogant it sounded.

Well, in order to not think that FDI benefits a country one must be at a very, very low level of understanding. The sentence is supposed to be the equivalent of "I know physics, I don't think objects fall faster if they have more mass."

It doesn't imply that I know everything there is to know about economics, because I obviously don't.

Which only makes you look more foolish...

Eh, ok. I don't think clearing up a misunderstanding is such a big deal but it seems to give you comfort to attack me a lot, especially on subjects you don't know very well, so...have fun with that, I guess?

Ehh, no, I was making fun of you for sounding arrogant and presumptious. I didn't claim to disagree.