Ireland's high current unemployment rate of 14.9 percent is a result from its economic situation : Ireland is in a recession. The article clearly stipulates this, there is a 'recession in the real domestic economy'. The recession arose from the housing bubble : mortgages were cheap, people overborrowed and then the high housing prices fell so that people were less wealthy and no longer able to pay their mortgages. Wealth is a determinant of AD. It is the added value of all assets or stocks. If wealth or perceived wealth increases, then so will a household's consumption of goods, thereby shifting demand, as the household feels 'wealthier' or able to purchase more. The reverse is also the case, when wealth declines, demand declines, such as in Ireland. The Irish were much less willing to consume goods, as they believed they were less wealthy or had less money( which they eventually did , upon having to pay mortgages; debt), and so consumption decreased, which thus shifted aggregate demand into a demand slide recession. This is a situation where prices in a nation inflate and output decreases, due to the lesser demand. If less is being produced, less factors of production are required. Thus labor, a major factor of production is no longer required in the economy, which gives firms the incentive to lay off many of their workers. This is the unemployment Ireland is experiencing. It is interesting that the article also depicts the  'austerity drive'  that the Irish government resulted to in the recession.  As it correctly suggests, this is 'self defeating', as during a demand slide recession the Keynesian policy follows that the government should not save its funding, but rather spend. In a time of recession, the government should spend,  so as to decrease unemployment stimulate the economy. If the government spends, this will have a multiplier effect through the economy, as it provides income to households ( by spending, the government employs labor), where househo

The article is concerned with the current economic situation in Ireland, namely a recession. This is a period of decline in an economy, where in the business cycle it is known as a 'trough'. This is illustrated well in the article through the decline of demand in the housing market, as a decrease demand is a typical characteristic of a recession. The overall demand or aggregate demand of a country decreases during a recession, as seen in the Irish housing market, as people have lost confidence in the economy, uncertainty has gone up and unemployment has increased. Consequently people save their money as the situation is unstable and they are unsure of their furture imployment and income. Saving is a leakage in the cycle and therefore corresponds to the decrease in aggreagate demand. In the article's context, The Irish are untrusting and therefore unwilling to invest in new housing. This is all a result of bad planning. In the 1990s, Ireland's economy was booming: banks were doing well, the housing market rising significantly and in large demand. Therefore the government decided to build Adamstown. Yet as the housing bubble broke and with it the faith and confidencein the Irish economy, people put their spendings " on hold" as the article illustrates, and areas of modern infra structure such as Adamsville became Ghosttowns.