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Irexit: Making the Worst of a Bad Situation

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  • Ronald B. Davies
  • Joseph Francois

Abstract

Relative to the rest of the EU, Ireland is especially vulnerable to the fallout from Brexit, both economically and politically. With increasing frustration over the reaction from Brussels, some are suggesting that an Irish exit from the EU would benefit the nation. A key argument for this is that it would allow for reintegration with the UK, thus preserving one of its largest trading partners. Using a structural general equilibrium model, we estimate that such a move would worsen the impacts of Brexit by as much as 250%, with low-skill workers disproportionately affected. This is due to the fact that while the UK is one of Ireland's single-nation trading partners, when compared to the EU27 as a group, it is much smaller.

Suggested Citation

  • Ronald B. Davies & Joseph Francois, 2018. "Irexit: Making the Worst of a Bad Situation," Working Papers 201812, School of Economics, University College Dublin.
  • Handle: RePEc:ucn:wpaper:201812
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    File URL: http://hdl.handle.net/10197/9454
    File Function: First version, 2018
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    References listed on IDEAS

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    1. repec:cep:cepbxt:02 is not listed on IDEAS
    2. Dhingra, Swati & Ottaviano, Gianmarco I. P. & Sampson, Thomas & Reenen, John Van, 2016. "The consequences of Brexit for UK trade and living standards," LSE Research Online Documents on Economics 66144, London School of Economics and Political Science, LSE Library.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Irexit; Brexit; Computable General Equilibrium;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations

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