On Friday I showed this chart in class. It's a time series plot of the percentage change in real GDP per capita in a given year from the year before. A perceptive student noticed that in one recession, the grey barred area for 2001/2, the line slopes up. See for yourself:
So here's my question, answers please in the comments, dear readers. Why did this line trend up in this year? I'm looking for a bit more than 'foot and mouth' or 'inward migration', but any ideas you have would be great.
Why would we expect the line to be downward sloping? It is for the other US recessions, but is seems the post-9/11 downturn in the US economy did not correspond to a slowdown in the growth rate of per-capita GDP over here.
The Irish growth rate was already slowing by late 1999/early 2000 as the export-led Celtic Tiger Phase One of the 1990s was drawing to a close but we never actually tipped into recession.
Would it have anything to do with the uptake of SSIAs ?
Just a superficial glance & guess might suggest that it's a combination of stats & ever widening disparity between Irl's. GDP & GNP. The MNCs increased productivity greatly in the period, but the home econ only slightly.
Inflation doubled thru' 2000 & peaked in Dec.2000. @ 7%...falling thru' 2001 to c. 3.7% in Dec. & stabilising in 2002 to ave. c.4.5%
Hence, real GDP per cap increase ( as pop. not moving significantly) as % on prev. yr.
But in periods of non-US recession it sometimes goes up and sometimes down so I don't think there is any significance to this. Stuff happens.
@Seamus, it seems FRED has deceived me-- the graph is showing US recessions and not those in the irish economy, If it had it would have captured the recession in 1987.
@Frank, that's what we thought in class at first, but we were looking for deeper causes. Turns out it wasn't that deep an explanation at all 🙂
@Dan, that is certainly the most likely explanation, thanks!
@Kevin, there's the science for you!