EU: In 2011, Bulgaria was the "poorest" member, Luxembourg the "richest" (user search)
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  EU: In 2011, Bulgaria was the "poorest" member, Luxembourg the "richest" (search mode)
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Author Topic: EU: In 2011, Bulgaria was the "poorest" member, Luxembourg the "richest"  (Read 3875 times)
Јas
Jas
Junior Chimp
*****
Posts: 8,705
« on: June 20, 2012, 02:00:32 PM »



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)
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Јas
Jas
Junior Chimp
*****
Posts: 8,705
« Reply #1 on: June 21, 2012, 02:08:37 AM »

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.



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.
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Јas
Jas
Junior Chimp
*****
Posts: 8,705
« Reply #2 on: June 21, 2012, 04:28:55 PM »

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! Smiley ). 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.
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