Businesses and employment rates grew very quickly and workers from other countries migrated to Ireland looking for jobs. A recession occurs when economic growth ceases or becomes negative (i.e. the economy starts shrinking). An economic recession is characterised by falls in sales for businesses and a rise in unemployment. Competition becomes more intense as firms have to try harder to find new opportunities to grow their business. Many businesses close and those that survive have to cut their labour and other costs to remain competitive. A depression is a severe and prolonged period of economic decline. In a depression demand for goods and services in the economy falls significantly, unemployment rises very sharply and there is a profound lack of business confidence in the future.
1990-2007: Economic growth was very strong and Ireland was known as the ‘Celtic Tiger’ economy. Demand for goods and services was high, unemployment was low and house prices rose sharply.
2008-2011: Over-lending by banks and an international economic crisis led to an economic crash. The economy began to shrink rapidly, house prices collapsed and unemployment and emigration increased rapidly.
This fluctuating pattern of growth and recession can be seen in countries around the world, throughout history. These fluctuations in economic activity over time are referred to as a ‘business cycle’.
