1. Fifty Shades Of Growth What Form Will The Post-Crisis Economy Take? BKR International Worldwide Meeting 2013 21 October 2013 Austin Hughes Chief Economist KBC Bank Ireland

2. Things You Already Knew About Economics It’s called ‘the dismal science’ for a reason

3. Things You Already Knew About Economics It’s called ‘the dismal science’ for a reason The two-handed economist isn’t a myth

4. Things You Already Knew About Economics It’s called ‘the dismal science’ for a reason The two-handed economist isn’t a myth In the long run we’re all….

5. Are You An Optimist Or A Pessimist?

6. Tomorrow will be great, good,ok, not too bad

7. How Much Permanent Damage?

8. First, Let’s Reach Escape Velocity

9. Risks Slightly Lower

10. Jobs The Key Focus

11. Fault Lines Exposed

12. Non Union?

13. In Alan, Jean Claude And Mervyn We Trust(ed)

14. Not Fed UpYet

15. Central Banks Now Promise ‘An Extended Period’ Of Easy Money

16. How Long Will It Take?

17. Few Inflation Fears In The ‘States

18. Or In The Euro Area

19. Or Even In The UK

20. Will Inflation Or Deflation Be A Bigger Problem

21. Deflation Seen As Potentially More Of A Threat..At Least For Some

22. Unless You’re Talking About Asset Prices

23. The Degree Of Adjustment Varies Widely

24. Different Tales

25. And In The Long Run….

26. Debt And Taxes Certain To Pose Problems

27. The Only Way Is Down?

28. Not Much Has Changed? [S]ome knowledgeable observers have recently made the case that the IT revolution, as important as it surely is, likely will not generate the transformative economic effects that flowed from the earlier technological revolutions. As a result, these observers argue, economic growth and change in coming decades likely will be noticeably slower. Fifty years ago, in 1963, I was a nine-year-old…it's interesting to ask how my family's everyday life back then differed from that of a typical family today. Well, if I think about it, I could quickly come up with the Internet, cellphones, and microwave ovens as important conveniences. [I]t doesn't seem to me that the differences in daily life between then and now are all that large. Heating, air conditioning, cooking, and sanitation in my childhood were not all that different from today. We had a dishwasher, a washing machine, and a dryer. My family owned a comfortable car with air conditioning and a radio, and the experience of commercial flight was much like today…The comparison of the world of 1963 with that of today suggests quite substantial but perhaps not transformative economic change since then.

29. A New World ‘Order’?

30. Getting Rich Isn’t Easy

31. …..Or Achieved Too Often. Source: World Bank

32. … while general commodity prices declining (Indices in USD, January 2000= 100) Oil price broadly flat… (Barrel Brent oil) Latest Commodity Super-Cycle Over Its Peak Source: Thomson Financial Datastream

33. Resource Management Is Still Key

34. People Are Resources Too CountryAverage population growth(%)Median Age 2010-20152015-20202015 Africa2.52.419.5 Australia1.31.237.4 Brazil0.80.731.2 China0.60.436.0 Europe0.10.041.4 India1.21.126.9 Indonesia1.21.028.4 Ireland1.11.035.9 Malaysia1.61.428.2 New Zealand1.00.937.3 United Kingdom0.60.540.5 United States0.8 37.7 Source: UNdata

35. Be Nice To Your Children

36. Different Speeds Of Ageing

37. What Countries Will Work? Working Age Population (mn) 20102030% change EU336321.6-4.3% of which Germany53.946.0-14.6% France42.041.8-0.1% Italy39.739.8+0.3% Netherlands11.110.5-5.9% Poland27.223.9-12.2% United Kingdom41.142.8+4.2% Ireland3.03.2+7.5% Source: EU Commission

38. The Irish Economy Is Still In Transition

39. A Nation Once Again

40. The Long And Binding Road

41. Some Signs Of Progress As Well As Pain

42. Housing Market Bottoming Out

43. A Recovery Won’t Be Credit Driven

44. The Irish Economy By Age Cohort Ongoing ‘natural’ increase supports housing turnover longer term outlook as well as educational sector. Source: CSO Initial migration effects of downturn expected to be reversed by strong natural increase. Initial decline caused by emigration. Gradual recovery expected. Prime earnings/saving s cohort expected to increase in coming years. Grey spending/saving power set to increase.

45. Summary  Apocalypse averted-when’s the sequel?

46. Summary  Apocalypse averted-when’s the sequel?  Out of intensive care- a still fragile economy

47. Summary  Apocalypse averted-when’s the sequel?  Out of intensive care- a still fragile economy  What made the Great Depression Great?

48. Summary  Apocalypse averted-when’s the sequel?  Out of intensive care- a still fragile economy  What made the Great Depression Great?  A new geography

49. Summary  Apocalypse averted-when’s the sequel?  Out of intensive care- a still fragile economy  What made the Great Depression Great?  A new geography  What sort of ‘new ‘economy?

50. Summary  Apocalypse averted-when’s the sequel?  Out of intensive care- a still fragile economy  What made the Great Depression Great?  A new geography  What sort of ‘new ‘economy?  Who will pick our care homes?

51. Summary  Apocalypse averted-when’s the sequel?  Out of intensive care- a still fragile economy  What made the Great Depression Great?  A new geography  What sort of ‘new ‘economy?  Who will pick our care homes?  Ireland open for business