If you were of the opinion that those "pointy heads" in economic institutions were all fusty old professor types, you should meet Mr - soon to be Dr - Danny McCoy.

The youthful environmental economist, who has recently taken over as editor of the Economic and Social Research Institute's (ESRI) Quarterly Economic Commentary is "a self-confessed TV watcher" especially Eastenders and Coronation Street. He admits not only to reading Hello! magazine but to buying it.

He's also what he describes as "a frustrated athlete". He has intervarsity medals for cross-country and middle-distance running, but now limits his exercise to cycling to work from his home in Rathfarnham every day.

Married to Ailish, who used to work in the Investment Bank of Ireland, and they have two sons, Toby (two-and-a-half) and Sam, who is 10 weeks old. "Have lecture notes will travel," he says by way of explaining the wide experience he has of teaching since he left UCD with a master's in economics 13 years ago. From Tuam, Co Galway, he did his primary degree in NUI Galway.

Apart from lecturing part-time in environmental economics at TCD, he has lectured in DCU's Business School, University College, London - "It's basically the top economics department in the UK" - and he gave a course in environmental economics in Oxford.

"I believe markets work and environmental problems are market failures and the solution is to fix the markets," he says. "The one thing I like about economics is that it challenges truisms. I like finding exceptions to rules. That is why, for our much-maligned profession, research is not a luxury. Navel-gazing such as `where are we going in society?' would be pooh-poohed by some people."

Between 1996 and this year, he worked in the research department of the Central Bank. He does not think the role of national central banks has been diminished by the role of the European Central Bank.

"The role has got more important in that Maurice Doyle is one-seventeenth of the council, whereas Ireland is one-two-hundredth of the size of the euro area. So the ability to punch above your weight for a governor is there on the basis of very good economic analysis done by his team at home." The Irish economy, he says, is a dynamic economy. There are two ways of looking at it: either as an economy spiralling out of control or one in a transition phase to a new, higher-growth path. Where before, the economy grew at 2 to 3 per cent, maybe now it will continue to grow at 4 or 5 per cent in the long term, he suggests.

"If you believe you are in this kind of transition to a higher growth path, then the Government should be facilitating that by increasing the infrastructure in order to cope with that demand. The Government should be investing in the economy, in the supply side story, increasing expenditure on infrastructure and reducing taxes to encourage more people into the workforce."

He concedes that there are very polarised views on this but says: "We would lean towards that second interpretation, that the economy is experiencing fundamental transition. That is what makes it exciting, taking over the Quarterly Economic Commentary. There is a fundamental uncertainty about what's actually going on.

"From a personal point of view, to have uncertainty after taking over a new job, it's quite nice to be in an environment where everyone is unsure over exactly what are the processes going on as well. It makes it exciting."

On inflation, he says that, while external factors are very important, domestic considerations are becoming increasingly significant. Expectations - especially non-productivity justified wage expectations - are a factor that must be watched closely. The services component of the Consumer Price Index has been on the rise pretty relentlessly. And unanticipated inflation is the problem, he believes.

He talks of stocks and flows to describe our economic activity. Wealth is a stock, he says. The flow is the rate at which we grow.

"Is it all going to end in tears?" he asks rhetorically. "There is certainly a downturn out there somewhere along the way. If we were going to continue growing at 10 per cent, we would be the richest country in the world. Sure, the flow is going to have to slow down. Will you start losing your wealth? Will that stock have to slow down? We are not going back to 1987 in terms of wealth, so our wealth is increasing on the back of those income flows." Our economic growth - of almost 10 per cent - is on the back of six years of growth. But he does not belong to the biblical "seven-years-of-plenty, seven-years-of-famine" school. "Psychologically, we could believe the economy was in bust if we just grow by 5 per cent . . . it's a danger."

For a small open economy, competitiveness is all important. "If you lose competitiveness, you lose markets. Therein lies the worry on the partnership talks," he believes. He says that if wage growth gets seriously out of line with productivity growth, it will ultimately lead to significant competitive losses. "If the euro were to suddenly change direction in combination with very high non-productivity justified wage growth, this would have a serious impact on living standards fairly directly."

He likes to think that the ESRI - occasionally called the "poverty institute" because of its concentration on social as well as economic issues - influences Government policy significantly. "We certainly confront the Government with a view on the economy which they can ignore - sometimes do - and sometimes at their peril, I would have thought. We put the counterview; they need to have fairly sound grounds to say we are wrong.

"The institute here is a classic 1960s think-tank. Very often they think the unthinkable and hopefully, not the undoable. Some people think our notions are politically naive. We called for the postponement of the tax cuts until the end of PPF. That is seen as politically naive by some. That is our role: to call it as we see it.

"We have time to think about it. By nature they have to react quickly. Our views would be considered opinions; while easily dismissed, perhaps they shouldn't be. But we can bring it to the public's attention because we are honest brokers.

"This place is quite an academic institution - lots of pointy heads - but it's directed at both social and economic policies, so we try to look at things in the round, not just the efficiency arguments, but equity and distribution arguments. It makes us wider than just stockbrokers."

In spite of predictions of a slowdown in economic activity, is Mr McCoy hopeful about the future of the Irish economy? "Very. I would be more pleased and more sanguine about this economy if our attitudes to migration and emigration were to be symmetrical. "There are obvious concerns about our attitudes in coping with diversity at the moment. I would be very confident for the future. I think these are teething problems and transitional and new. "I think that we can sustain jobs not just for Irish people but for other people because we are a dynamic economy which has been caught short. It doesn't have the capacity to supply the demand it's facing."