International Financial Flows and the Irish Crisis

This paper explores the contribution of international financial flows to the boom-bust-recovery cycle in Ireland. It finds that a nuanced interpretation is required, in that bank-intermediated debt inflows certainly contributed to the amplification of the property boom during 2003-2007 but that other types of international flows have played a stabilising role through a variety of mechanisms, with a new wave of inflows a key component of the current recovery phase.