Ireland is a small open economy and has experienced pronounced macroeconomic volatility down the decades. Fifty years ago, in the mid-1970s, a severe frost in Brazil damaged the coffee harvest and world prices rose sharply. Energy costs in sterling also shot up, which mattered – at the time, the Irish currency was linked one-for-one to the pound sterling and Irish inflation tracked closely the rate in the UK, then Ireland’s largest trading partner.  Undeterred, the Irish government decided to cut indirect taxes to counter an inflation rate which had surged above 20 per cent, against a background of repeated sterling…

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