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Modelling the Medium- to Long-Term Potential Macroeconomic Impact of Brexit on Ireland

Author

Listed:
  • Adele Bergin

    (Economic and Social Research Institute, Trinity College Dublin)

  • Abian Garcia-Rodriguez

    (Economic and Social Research Institute)

  • Edgar L. W. Morgenroth

    (Economic and Social Research Institute, Trinity College Dublin)

  • Donal Smith

    (Department of Finance)

Abstract

There is almost a complete consensus in the international literature that Brexit will have a negative effect on the UK economy both in the short and long run. The UK is one of Ireland’s closest economic partners and little is known about the potential macroeconomic impact that Brexit could have on the Irish economy. In this paper, we use the new COre Structural MOdel of the Irish economy (COSMO) to attempt to quantify the medium- to long-run impact of Brexit on the Irish economy under a series of alternative scenarios. These scenarios are intended to cover a range of potential agreements between the UK and the EU. We find that the level of Irish output is permanently below what it otherwise would have been in the absence of Brexit.

Suggested Citation

  • Adele Bergin & Abian Garcia-Rodriguez & Edgar L. W. Morgenroth & Donal Smith, 2017. "Modelling the Medium- to Long-Term Potential Macroeconomic Impact of Brexit on Ireland," The Economic and Social Review, Economic and Social Studies, vol. 48(3), pages 305-316.
  • Handle: RePEc:eso:journl:v:48:y:2017:i:3:p:305-316
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    References listed on IDEAS

    as
    1. Monique Ebell & James Warren, 2016. "The Long-Term Economic Impact of Leaving the EU," National Institute Economic Review, National Institute of Economic and Social Research, vol. 236(1), pages 121-138, May.
    2. Jessica Baker & Oriol Carreras & Monique Ebell & Ian Hurst & Simon Kirby & Jack Meaning & Rebecca Piggott & James Warren, 2016. "The Short–Term Economic Impact of Leaving the EU," National Institute Economic Review, National Institute of Economic and Social Research, vol. 236(1), pages 108-120, May.
    3. Barrett, Alan & Bergin, Adele & FitzGerald, John & Lambert, Derek & McCoy, Daire & Morgenroth,Edgar & Siedschlag, Iulia & Studnicka, Zuzanna, 2015. "Scoping the Possible Economic Implications of Brexit on Ireland," Research Series, Economic and Social Research Institute (ESRI), number RS48.
    4. Baker, Jessica & Carreras, Oriol & Kirby, Simon & Meaning, Jack & Piggott, Rebecca, 2016. "Modelling events: The short-term economic impact of leaving the EU," Economic Modelling, Elsevier, vol. 58(C), pages 339-350.
    5. Ottaviano, Gianmarco & Pessoa, João Paulo & Sampson, Thomas & Van Reenen, John, 2014. "The costs and benefits of leaving the EU," CFS Working Paper Series 472, Center for Financial Studies (CFS).
    6. Bergin, Adele & Duffy, David & Foley, Daniel & Garcia Rodriguez, Abian & Lawless, Martina & Mc Inerney, Niall & McQuinn, Kieran, 2016. "Ireland’s Economic Outlook: Perspectives and Policy Challenges," Forecasting Report, Economic and Social Research Institute (ESRI), number EO1 edited by Bergin, Adele & Morgenroth, Edgar & McQuinn, Kieran, April.
    7. Ebell, Monique & Hurst, Ian & Warren, James, 2016. "Modelling the long-run economic impact of leaving the European Union," Economic Modelling, Elsevier, vol. 59(C), pages 196-209.
    8. Lawless, Martina & Morgenroth, Edgar, 2016. "The Product and Sector Level Impact of a Hard Brexit across the EU," Papers WP550, Economic and Social Research Institute (ESRI).
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    Citations

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    Cited by:

    1. Bergin, Adele & Duffy, David & Foley, Daniel & Garcia Rodriguez, Abian & Lawless, Martina & Mc Inerney, Niall & McQuinn, Kieran, 2016. "Ireland’s Economic Outlook: Perspectives and Policy Challenges," Forecasting Report, Economic and Social Research Institute (ESRI), number EO1 edited by Bergin, Adele & Morgenroth, Edgar & McQuinn, Kieran, April.
    2. Christine Arriola & Caitlyn Carrico & David Haugh & Nigel Pain & Elena Rusticelli & Donal Smith & Frank van Tongeren & Ben Westmore, 2018. "The Potential Macroeconomic and Sectoral Consequences of Brexit on Ireland," OECD Economics Department Working Papers 1508, OECD Publishing.
    3. Lawless, Martina & Morgenroth, Edgar, 2017. "Ireland’s international trade and transport connections," Papers WP573, Economic and Social Research Institute (ESRI).
    4. Bergin, Adele & Garcia Rodriguez, Abian & Mc Inerney, Niall & Morgenroth, Edgar, 2016. "Baseline: Methodology, Assumptions and Projections," Book Chapters,in: Ireland’s Economic Outlook: Perspectives and Policy Challenges Economic and Social Research Institute (ESRI).
    5. repec:esr:qecsas:2018:spr:lawless is not listed on IDEAS
    6. repec:esr:forcas:qec2018spr is not listed on IDEAS
    7. Duffy, David & Foley, Daniel & Mc Inerney, Niall & McQuinn, Kieran, 2016. "Demographic Change, Long-Run Housing Demand and the Related Challenges for the Irish Banking Sector," Book Chapters,in: Ireland’s Economic Outlook: Perspectives and Policy Challenges Economic and Social Research Institute (ESRI).
    8. Lawless, Martina, 2018. "Irish-UK Services Trade and Brexit," Papers WP595, Economic and Social Research Institute (ESRI).
    9. repec:esr:resser:bkmnext362 is not listed on IDEAS
    10. Lawless, Martina & Morgenroth, Edgar, 2016. "Opportunities and Risks for Foreign Direct Investment," Book Chapters,in: Ireland’s Economic Outlook: Perspectives and Policy Challenges Economic and Social Research Institute (ESRI).

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    Keywords

    Brexit; macroeconomics; Ireland;

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