The impact of the Economic Adjustment Programme for Ireland: a synthetic control approach

Abstract

We examine the effect of the Economic Adjustment Programme for Ireland on the country’s per capita income. We are the first to provide empirical analysis on the importance of the program to Irish economic recovery post-financial crisis. We employ the synthetic control approach with bias correction with World Bank Opendata and Irish Central Statistics Office data from 2000 to 2019. Our results indicate that the EAP had a positive and statistically significant impact on Ireland’s per capita income, with an average effect of 5,626.27 US$. These conclusions are robust to a placebo test and the Synthetic Difference in Difference estimator.