Modelling the medium- to long-term potential macroeconomic impact of brexit on Ireland

September 11, 2017 | Journal Article

Authors: Adele Bergin , Abian Garcia Rodriguez , Edgar Morgenroth , Donal Smith
Economic and Social Review , Vol. 48, No. 3, Autumn 2017, pp.305-316

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.

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