A Gravity Model Analysis of Irish Merchandise Goods Exports under Brexit

TL;DR

This paper uses a gravity model to analyze how a hard Brexit could significantly reduce Irish merchandise exports, especially impacting traditional sectors like Agriculture and Food, with substantial economic consequences.

Contribution

It applies a PPML gravity model to Irish export data to quantify Brexit's potential economic impact, focusing on micro-level effects and sector-specific vulnerabilities.

Findings

Hard Brexit could reduce Irish income by over 9 billion euros annually.

Traditional sectors like Agriculture and Food are most affected.

The effect of Brexit on exports would be sustained over time.

Abstract

We examine the effect of a Hard Brexit on Irish Exports using the PPML Gravity Model and Irish Exports data at the micro level. We find a hard Brexit could reduce Irish national income by over 9 billion euro annually and the effect would be sustained mst in th etraditional sectors of Agriculture and Food production of the Irish economy