Economists and Central Bankers queued around the block this week to administer a coup de grace to the national economic mascot. In its place they proffered a new catch phrase: "the growth recession". This clumsy, somewhat less user-friendly expression was coined by the boffins at the Economic and Social Research Institute. It describes an economy which, while not technically in recession, is growing at significantly less than its full potential. It reflects the Government-sponsored economic think tank's view that while the Republic's economy has not shrunk for two consecutive three-month periods - the classic definition of a recession - it is certainly not growing and may well have ground to a halt.

The Taoiseach was understandably more reluctant to lay the nation's favourite clichΘ to rest. The economy is now growing at 5 to 6 per cent, but this will fall next year, he said. The Tβnaiste was positively bullish about the tiger, telling us all to wise up and stop talking the economy down. "The fundamentals are sound," she claimed.

The donnish Central Bank governor, Maurice O'Connell, was less sanguine. He told the Oireachtas Committee on Finance and the Public Service that the economy is probably not growing at the moment. "It would seem the Celtic Tiger phase is over now," he said.

The late Celtic Tiger was born in 1994 when Morgan Stanley, the US merchant bank, published a research report on the Irish economy. The tiger tag was borrowed from a number of South East Asian counties experiencing above average growth, such as Indonesia and Thailand. The author of the report, Kevin Gardiner, was one of the first to realise that something similar was on the cards in Ireland. He subsequently apologised for the Celtic Tiger tag as a "crime against good taste". But the damage was done, particularly when he was proved right.

What Mr Gardiner had spotted was that, through a combination of sound economic planning and some good fortune, Ireland had become an extremely competitive place in which to make goods in the early 1990s. Wages were low, workers were plentiful and the Government supportive. The Irish pound was weak compared to the currencies of most of the major export markets. The result was a double whammy: it was cheap to make things in Ireland and even cheaper when you counted the cost in dollars and marks. This "super-competitiveness", coupled with strong global demand for the sort of high-tech products made in Ireland such as PCs and software, produced the boom in exports and inward investment that became known as the Celtic Tiger.

So what has gone wrong? Certainly Ireland has become a more expensive place to make things, but still remains competitive. The weakness of the euro - which absorbed the pound in January 1999 - has more than compensated for the increase in wages over the last seven years.

The real problem is that demand for the sort of goods made in Ireland has fallen sharply as the US economy started to slow earlier this year. The tragic events of September 11th only served to make things worse and to postpone the eventual recovery. Before the attacks, US consumers were still spending, but their confidence evaporated in the wake of the atrocities.

The Celtic Tiger may not be quite ready for the knacker's yard but it has certainly "gone to sleep for a while", Mr Gardiner told The Irish Times this week. Many of the fundamentals that underlined the boom are still in place, such as a well-educated, English-speaking workforce and attractive tax rates, according to Mr Gardiner. If Ireland can hold onto these competitive advantages then it should be able to boom once again when the world economy recovers, he says. We may yet see Celtic Tiger - the sequel.

Mr Gardiner's well-founded optimism is of little comfort to the several thousand people who have lost their jobs in the last few weeks. They are probably more interested in what the ESRI and Mr O'Connell will have to say about when the domestic economy will pick up.

There is no real consensus on the issue. Instead, there is a debate about the shape of the recession - assuming you first agree that there is one. Optimists, including the ESRI, are plumping for a v-shaped recession, characterised by a swift slow-down and an equally swift recovery.

As befits a student of the classics, the Central Bank governor is more of a Cassandra, warning that the prospects of a sharp recovery could be delayed. There is agreement about what will dictate the timing of the recovery: the bounce in the US economy. But that is pretty much where the consensus ends.

The chairman of the US Federal Reserve, Alan Greenspan, told the US Congress recently that he was not in a position to predict when the US economy would start to recover. If Mr Greenspan - the most powerful banker in the world - does not know what is going on, how can Ireland's Minister for Finance do any better, argues the Finance Minister, Charlie McCreevy, with some justification. There is also very little Mr McCreevy can do. Ireland ceded control over most of its economic toolbox to Europe when it joined the single currency in 1999. The priority for Mr McCreevy is to make sure he does not make things worse in his coming Budget by letting public spending run ahead.

The Federal Reserve chairman is pulling out all the stops to try to kick-start the US economy. Last Tuesday saw the Federal Reserve cut US interest rates for the 10th time since the start of the year, bringing them to 2 per cent, their lowest level in almost four decades. Further cuts are not ruled out. US rates are now so low that the cost of borrowing is effectively zero, given that interest rates are now below inflation rates. The US authorities are banking on the availability of cheap money, combined with large dollops of Government cash and tax breaks, to get the economy moving by the middle of next year. If this happens, the Irish economy can be expected to creak back to life towards the end of the year, but overall growth will still be less than 3 per cent.

Growth rates of this magnitude are not to be sneezed at, points out Danny McCoy, the ESRI economist who this week added the term "growth recession" to our cultural lexicon. This may be the sort of growth level we experienced in 1993 - when the Celtic Tiger was but a cub - but the impact will be much greater.

Economic growth is measured in terms of Gross National Product, which is the value in monetary terms of everything produced by the economy. In 1993 it increased by £803 million, or just under £230 per person. An equivalent 2.6 per cent increase in 2002 would require GDP to grow by £1.5 billion, or the equivalent of £400 for every man, woman and child.

Not bad for a sleeping tiger.