Eoin McLaughlin on British pounds – Irish rates

According to The Irish Times, 1956 was one of the most challenging years in the history of the Irish state. The macroeconomic crisis of 1955–56 stands as a pivotal moment in modern Irish history, yet its underlying causes remain debated. Two main interpretations have emerged: one attributes the crisis to expansionary fiscal policy, while the other sees it as a result of misguided monetary policy. Eoin will revisit the crisis to examine how it unfolded. In 1955, Ireland—despite operating under a fixed exchange rate with the British pound—briefly pursued an independent monetary policy. The analysis highlights how the Irish response to rising UK interest rates was shaped by a misreading of a 1955 run on sterling. In addition, Eoin demonstrates how the structure of the Irish banking system, particularly its all-island network, enabled capital flight during this period.

Eoin is a Professor of Economics at Heriot-Watt University, specialising in economic history. His research explores financial crises, sovereign debt, and the long-term trajectory of Irish economic development. He has published extensively on the historical foundations of fiscal and monetary policy in Ireland. Eoin is currently a Fellow at Panmure House and is working on a book titled The Inclusive Wealth of Nations, to mark the 250th anniversary of Adam Smith’s Wealth of Nations.