Ireland FDI

Ireland, during the Celtic Tiger, experienced a very large amount of FDI from countries across the globe.  After the collapse of the tiger, the amount of FDI declined, but this year, McDonald’s made the announcement that it plans to add 700 jobs to the Irish economy within the next three years.  If three years is considered the short-run, according to the specific- factors model, this inflow of capital should increase wages, decrease the returns on capital, land, and overall increase in the PPF for Ireland.  If three years is considered to be the long-run, according to the Heckscher-Ohlin model, the only change in the economy would be an outward shift in the PPF.  One thing neither of these models takes into consideration is unemployment because both assume full employment. I wonder if there would be similar effects as the model if unemployment was variable.  I would think that there will still be an overall increase in the PPF regardless of the time period. In the short-run, FDI would create an increase in wages only in the sense that it will create jobs and those who did not have an income now will earn one.

http://www.reuters.com/article/2012/11/01/us-ireland-growth-idUSBRE8A01CG20121101