Lower revenue would have pushed the Government accounts into deficit and a higher debt ratio at the outset of the global financial crisis. Household incomes would have been much lower too, with per capita personal consumption running about 8 per cent lower than actual in 2007.
Of course, different households were affected in differing degrees, resulting in large distributional shifts which are the subject of important ongoing research. Heading into the global recession, then, the Irish economy would have been smaller, with more moderate wage rates and a somewhat higher Government debt and deficit. It would have been better placed to absorb what was coming.