Worst-Case Scenario: Anybody armed with even a hazy knowledge of Greek mythology will recall that its narratives are peppered with tragedy.

In the same way, the ESRI warns, there is no "inevitability" about the success of the Irish economy, with numerous stumbling blocks lying in its path over the coming decade. Chief among these potentially tragic factors, according to the Medium-Term Review, would be the Government's failure to address competitiveness pressures.

Dramatic effects would ensue from the omission, the economists say, warning that living standards would decline by 10 per cent by 2010 under such conditions. Unemployment would explode into double digits and GNP would struggle to register positive growth. Wage and price inflation would far outpace productivity improvements, while the infrastructural deficit would remain unresolved.

In the blink of an eye, the Republic's youth would once again be stepping on to boats and planes to seek work in more buoyant climes.

The crash would have simple roots - higher production costs would lead to lower global demand for Irish goods and output would fall.

The infrastructural shortfall would work to choke the domestic economy, while inflation could result in wage rates rising 15 per cent above the levels foreseen in the benchmark scenario.

The Government would react to the imbalances by raising taxes to ensure that it did not have to change its expected borrowing requirements.

The labour market would thus feel further pressure and Irish competitiveness would suffer even more on the global stage.

The biggest loser in this rout would be manufacturing. By 2010, traditional manufacturers would be forced to survive with output 5 per cent beneath "benchmark" levels. Hi-tech companies would be even worse-off.

And it could get worse. The benchmark scenario is based on a euro/dollar exchange rate of between $1.15 and $1.20 over the period until 2010.

A dollar shock leading to a rate of $1.40, and a consequent 10 per cent weakening in sterling would be the ultimate "worst-case scenario", the ESRI advises. US inflation would rise and interest rates would climb in response, thus hitting growth prospects in the United States.

European competitiveness would again feel serious pain and Irish GNP would be more than 5 per cent lower than the benchmark by 2006.

Wages and consumer prices would decline sharply and, most significantly, the public finances would come under severe pressure.

Spending would be severely cut and the deficit would expand rapidly. Icarus, in other words, would meet his watery end.

Fortunately, however, the ESRI has tended in the past to underestimate the economy's potential for expansion. With this in mind, the think-tank's economists have also considered how higher global demand would change the economic outlook.

The ESRI says that if this demand could be properly managed, GNP would be about 0.7 per cent higher than the benchmark each year between now and 2010.

Inflation would decline and the tax burden would be reduced.

Before long, according to the Review, the Republic would revert to skilled immigration to provide the extra capacity it would require to fulfil demand.

Provided that these extra workers could be adequately housed and infrastructure could meet their needs, Icarus would continue to fly.

The Review's authors are sceptical of this merry outcome however, pointing out that higher flows of immigrants would, in reality, lead to further infrastructural congestion and higher property prices as housing supply failed to meet demand.