Eithne Murphy

An empirical analysis of short-run and long-run Irish export functions : does exchange rate volatility matter?

We analyse the long-run and short-run relationship between merchandise export volume and its determinants, foreign income, relative prices and exchange rate volatility, using the techniques of cointegration and error correction. The model was estimated for Irish exports and sectoral exports SITC 0-4 and SITC 5-8 to the EU using quarterly data for the period 1978-1998. The sectoral classification corresponds to the exports of mainly indigenous Irish firms and multinationals, respectively. We find that the exchange rate volatility has no effect on the volume of trade in the short-run but a significant positive effect in the long run. This is true in the aggregate and for our sectoral classifications. We can tentatively conclude that the decline in intra-EU exchange rate volatility associated with the single currency will lead to a long-run fall in Irish exports to the EU.

The inadequacy of cost of living indices based on subjective preferences: an ethical and methodological critique

In this paper we argue that there is scant justification for replacing the traditional fixed‐basket Laspeyres price index with so called ‘true cost of living indices’. We begin with a discussion of the possible explanations for some empirical results for inflation found for different social groups in Ireland in the late 1990s. Our arguments concerning appropriate inflation indices are primarily ethical and are not dependent on these results being interpreted in a non‐neoclassical vein. They do however gain extra force if one accepts non‐neoclassical explanations for the empirical results. We go on to draw conclusions as to how best to measure the welfare effects of changes in the price of goods. This links in to the broader debate regarding objective versus subjective measures of welfare.

Conservation and Rural Environmental Protection Schemes

One of the main effects of intensification of agriculture in the last half century has been the reduction in the area of the various semi-natural habitats associated with traditional, mixed farming (Vickery et al. 2004). In general, since the land cover type and productivity of a specific location determine intensity of farming practices, the greatest habitat losses have occurred in lowland, fertile areas dominated by arable farming. However, as the RSPB (2001) point out, the decline in habitat quality has also been a major factor in marginal agricultural areas. Solutions to these problems of habitat loss have, in general, involved, firstly, the agricultural landscape being targeted for remedial work and secondly, the motivation of landowners by policymakers to change any farm practices that are detrimental to the rural environment. Incentives have been provided through a range of policy measures including agri-environment and wildlife management schemes.