Sorry about the delay in responding to Doug's request. The best source on this question is The Irish Economy: Celtic Tiger or Tortoise? by Antoin Murphy of Trinity College Dublin available from Money Markets International 26 Lr. Baggot Street Dublin 2 Ireland fax 1-6765250 Highlights: "The dominant factor in Ireland's growth performance has been growth in exports. The growth in manufacturing exports has been primarily driven by the growth of exports of foreign owned MNCs. The foreign owned MNCs dominate industrial activity accounting for nearly three quarters of the net manufacturing output of the Irish economy. Within the foreign owned MNC grouping three sectors, referred to as the three Cs (Computers, Chemicals, and Cola Concentrates), dominate, producing two thirds of the net manufacturing output of all foreign owned MNCs... The growth of exports of the Irish subsidiaries of foreign owned NMCs has been predominantly driven by their transfer-pricing activities. Such transfer pricing activities may be detected from the very high output and turnover per employee ratios of the foreign owned MNCs relative to their Irish counterparts. The dominance of the foreign owned MNCs in the generation of manufacturing output and exports, conbining with the belief that a great part of this growth is just transfer pricing, implies that a great part of Ireland's so called economic growth is illusory... This means that the foreign owned MNCs are generating a souffle effect on the National Income Accounts..." To return to Doug's original concern, Murphy concludes among other things that "The Exchequer Borrowing Requirement/GNP or GDP ratio is underestimated." It is widely agreed along with Jim Devine that using GNP can correct for some of the problem but this still doesn't catch retained earnings and foreign loans by MNCs. In addition the distortions in the statistics caused by this problem are probably pervasive. The relevance of this to the states is that transfer pricing represents a big loss to the IRS. It also illustrates the extent to which states lose control of even basic information in a world dominated by MNCs. Terry McDonough