Dr. Mark Cassidy:

I thank the Deputy. There is a couple of different elements to that. The first would be a distinction I would make between national income and national wealth in the same way that a household will have its annual income and also its annual wealth. When we talk about GNI, GDP and all of these measures they relate to income so they relate to how much an economy is producing or, alternatively, how much an economy is spending or earning within a year. They do not include factors of wealth such as assets, housing or the like. We have very good cross-country comparisons on income. We have very poor cross-country comparisons on wealth because it is very difficult to compare many of the assets an economy might have in order to put a figure on those. I might restrict the answer to income, which is what these measures relate to, and say two things about them. We published something on this recently by our previous Governor, Professor Patrick Honohan, which looks at different measures of income that are used and how each may not be appropriate and can give very misleading results.

To summarise, if we look at GDP, which is what most economists around the world use, Ireland comes out as the richest country, in income terms, in the European Union and the fifth richest in the world. That is entirely misleading and it is because GDP is inflated by some factors relating to the multinational sectors that in no way benefit the incomes of the Irish economy. If we look at alternative measures just for those, we are probably around eighth highest in the European Union. That is probably a reasonably meaningful comparison.

Professor Honohan also looked at what happens if we adjust that for the prices people pay. Two countries may have the same incomes but one may be paying twice as much for its goods and services, and even for housing costs within a year, than another. Ireland has an extremely high price level compared with other European countries, so if we adjust for the price level, again, we are down around eighth to 12th in the European Union, which is more meaningful.

I would make one other point on that. National income is purely a financial and monetary concept. There are also broader measures of welfare which are extremely important to take into consideration. They may also reflect health, education and measures of well-being and happiness within an economy. These are more difficult to measure. They may be more representative of welfare in one country compared with another. There is one such measure that Professor Honohan's publication mentioned, which is a United Nations human development indicator. It includes all of these and when that is properly measured for Ireland, again, we are somewhere around the middle of the pack in terms of measurement compared with other European countries. My apologies for going back and forth with a couple of different concepts in respect of measurement but I hope what I said goes towards answering the Deputy's question.