Dr. Eddie Casey:

The main thing to point out is that GDP and GNP have held up much better than the domestic measures we look at, the GNI*. All our focus has shifted to GNI*. We have tried to promote that re-emphasis in our reports by scaling everything we look at relative to GNI* and looking at growth rates in GNI* terms. It is how we think about the economy now. If we look at tax revenues that the Government takes in, it is a much better way of explaining what is happening with those tax revenues. There is a much tighter relationship historically with tax developments if we look at tax relative to GNI*, rather than if we look at things like GDP.

Where we are now, if we take GNI* relative to GNP, the former is at about three quarters the level of the latter and actually closer to half of what GDP is. We can see that the scale of the gap between the two measures has ballooned in recent years. We remember the 2015 surge in GDP and the claims of “leprechaun economics” that were being made internationally. GNI* and GDP diverged quite a bit that year, and that divergence has continued ever since. This highlights the degree of pollution in the data that is caused by large-scale activities by foreign-owned multinationals.