The Irish Property Bubble of 1995-2010; Japanese Lessons for the Celtic Tiger

Abstract: Lauded for its success and heralded as an economic model for peripheral European countries to follow, since the bursting of the Irish property bubble in 2008 the management of the Celtic Tiger by the Irish state has been castigated as expressively how not to manage an economic bubble. Following a decade and a half of continuous growth averaging over six per cent, the Irish economy has since experienced significant depression which is currently stagnating with seemingly little prospect of abating. Since 2008, much talk within the Irish media has centred on whether the state might have managed the Celtic Tiger better and thus averted much of the destruction wrought by the bursting of the Irish property bubble. Thus the purpose of this thesis was to ascertain whether the Irish state might have learned valuable lessons to avert such a property bubble from a previous case of property bubble, namely that of Japan in the late 1980s and early 1990s. This thesis compares the two cases, establishing their similarities – and thus grounds for comparison – with particular focus on the role played by both states. It then makes a number of suggestions as to what lessons the Irish state might have taken from the Japanese case so as to reduce the over-inflation of the Celtic Tiger’s property bubble, and thus averting much of the fallout caused by its 2008 bursting. It then concludes by that stating that while previous Ireland’s economic growth was regarded with something as approaching awe, in the future it might instead be studied as an example of how not to manage an economic boom.