The Republic needs to take the foot off the accelerator if it is not to risk a bust, warns the Economic and Social Research Institute's director, Prof Brendan Whelan.

Prof Whelan, who has the top job at the State's leading economic think-tank, says his main hope now is that growth will be successfully moderated to a level of 4 or 5 per cent which ought to be sustainable in the long run.

"But if we try and keep the foot on the accelerator, we are intensifying problems such as house price growth and rising wages. We need to get it down to a moderate level," he adds.

Prof Whelan admits, nonetheless, that there will be a "big prize" for whoever calls the end of the boom correctly. He insists that his ESRI colleague, Prof John FitzGerald, got a lot of stick for the organisation being "hopelessly optimistic" in the early 1990s, although of course it did not predict the sheer scale of the then-forthcoming boom.

He also says he is concerned that a downturn in key US sectors could have a "more precipitous" impact on the economy, despite the fact that the US multinationals are putting down deeper roots here in terms of support and training.

Perhaps surprisingly, he is far less worried about the impact of rising wages. We would need to "lose our heads entirely" over wage rises to engender a similar shock, he contends.

While engineering ways to continue growing at 8 per cent or more is not a sensible option, according to Prof Whelan, it is very important that efficiency is constantly improved. And from this point of view the deregulation of services such as pubs and taxis is increasingly important.

He also believes that spending on infrastructure is still vitally important, not just on roads and telecoms but also housing. "It is also very important here that in the rush to build, we do not allow things which will cause degradation to the environment."

He believes that policy will eventually change to put the jobs where people want to live rather than the other way around. But then, as far back as 1981, he had enough of commuting and he and his wife moved to a house just across the road from the ESRI's Adelaide Road headquarters in Dublin.

But equally important in Mr Whelan's eyes is social policy which, he believes, has not been the subject of nearly-enough focus. Poverty, widening gaps between the rich and poor and inequality in education all have to be faced up to now that the Exchequer has the resources to tackle them all. "We're not very good at giving people a second chance in education," he points out.

He maintains that the number of Irish people on low incomes is very high in EU terms, equivalent to the levels in Spain and Britain and far higher than in countries such as France, Belgium or the Netherlands. Welfare rates need to be raised in line with earnings growth and not prices, he says. While some will argue that that could take away the incentive for people to go out to work, Mr Whelan believes that issue is far better being tackled through the taxation system.

He says that while most of those on welfare are now physically better off, the inequality has stayed the same rather than improving. "It is very difficult for poor people to keep up."

The ESRI's research covers all these topics. Prof Whelan heads up a team of 11 research professors and seven senior research officers, as well as research officers and their assistants.

The organisation, Mr Whelan repeatedly points out, is a non-profit making private limited company and is entirely independent of Government, contrary to many people's perceptions.

The body has moved from almost 100 per cent funding for its activities coming from the Exchequer to receiving about 30 per cent in more recent years. The balance is made up of fees paid to undertake specific research for various Government Departments and State agencies. It is to the ESRI that Departments such as Finance often turn when they need research. The latest work is, of course, the initial work for the next National Development Plan. It also does a good deal of work with international bodies such as the European Commission, the Organisation for Economic CoOperation and Development, the World Bank and the International Monetary Fund.

Government funding covers some of the costs of publications such as the medium-term review, the quarterly commentaries and a series of research papers.

The ESRI does little work for the private sector and one reason for this, according to Prof Whelan, could be its emphasis on publishing all reports and its refusal to come out with a particular line.

He stresses that it is always his own decision whether or not to publish a particular piece of research and that does not always fit very well with an individual company's corporate strategy. He is responsible to the executive committee which is made up of a variety of former central bankers, Department of Finance secretaries, trade union officials, academics and some business people. According to Prof Whelan the institute tries to take one third of its committee from academia, one third from the public sector and one third from the private sector. Trade union officials are deemed to be part of the private sector.

A "lifer" in the ESRI, Prof Whelan studied economics in University College Dublin and apart from a two-year stint in the London School of Economics he has worked in the organisation since 1969.

Part of the Colaiste Mhuire influx into Irish economics, he is still a keen Irish speaker, frequently joining the ESRI's Irish table in the canteen on a Thursday. Economists such as Dr Peter Bacon, Mr Robby Kelleher of Davy Stockbrokers, Mr Patrick Honohan of the World Bank and Fine Gael's Mr Alan Dukes were also pupils at the school.

A keen fisherman he spends a lot of spare time fishing the lakes around Co Mayo where his brother is head of salmon research. Other interests include reading and gardening.