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


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November 7, 2016 | ESRI Working Paper

WP548 Authors: Adele Bergin , Abian Garcia Rodriguez , Niall Mc Inerney , Edgar Morgenroth , Donal Smith

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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