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

  • 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
Keywords: Brexit, macroeconomics, Ireland

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.
Published
2017-09-12
Section
Policy Section Articles