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

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  • Bergin, Adele
  • Garcia Rodriguez, Abian
  • Mc Inerney, Niall
  • Morgenroth, Edgar
  • Smith, Donal

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 macro-economic 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.

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  • Bergin, Adele & Garcia Rodriguez, Abian & Mc Inerney, Niall & Morgenroth, Edgar & Smith, Donal, 2016. "Modelling the Medium to Long Term Potential Macroeconomic Impact of Brexit on Ireland," Papers WP548, Economic and Social Research Institute (ESRI).
    • Handle: RePEc:esr:wpaper:wp548
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    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. Rafal Kierzenkowski & Nigel Pain & Elena Rusticelli & Sanne Zwart, 2016. "The Economic Consequences of Brexit: A Taxing Decision," OECD Economic Policy Papers 16, OECD Publishing.
    7. Martina Lawless & Edgar L. W. Morgenroth, 2019. "The product and sector level impact of a hard Brexit across the EU," Contemporary Social Science, Taylor & Francis Journals, vol. 14(2), pages 189-207, April.
    8. 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, march.
    9. 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.
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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, march.
    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. Morell, Joe & Rice, Jonathan & Shaw, Frances, 2022. "A Framework for Macroprudential Stress Testing," Research Technical Papers 7/RT/22, Central Bank of Ireland.
    4. Lawless, Martina & Morgenroth, Edgar, 2017. "Ireland’s international trade and transport connections," Papers WP573, Economic and Social Research Institute (ESRI).
    5. Bergin, Adele & Economides, Philip & Garcia-Rodriguez, Abian & Murphy, Gavin, 2019. "Ireland and Brexit: modelling the impact of deal and no-deal scenarios," Quarterly Economic Commentary: Special Articles, Economic and Social Research Institute (ESRI).
    6. 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).
    7. Lawless, Martina & Morgenroth, Edgar, 2018. "Brexit and Irish Consumers," Quarterly Economic Commentary: Special Articles, Economic and Social Research Institute (ESRI).
    8. McQuinn, Kieran & O'Toole, Conor & Economides, Philip & Monteiro, Teresa, 2018. "Quarterly Economic Commentary, Spring 2018," Forecasting Report, Economic and Social Research Institute (ESRI), number QEC2018SPR, march.
    9. Morgenroth, Edgar, 2019. "Brexit Impacts: Opportunities for German-Irish Trade," MPRA Paper 96602, University Library of Munich, Germany.
    10. 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).
    11. Adolfo Maza & Paula Gutiérrez‐Portilla & José Villaverde, 2020. "On the drivers of UK direct investment in the Spanish regions: A spatial Durbin approach," Growth and Change, Wiley Blackwell, vol. 51(2), pages 646-675, June.
    12. Lawless, Martina, 2018. "Irish-UK Services Trade and Brexit," Papers WP595, Economic and Social Research Institute (ESRI).
    13. Lawless, Martina, 2018. "Intermediate goods inputs and the UK content of Irish goods exports," Research Series, Economic and Social Research Institute (ESRI), number BKMNEXT362.
    14. 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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