Brexit and Likely Implications for Ireland

Abstract

This paper examines the impact of a Brexit (British Exit from the EU) on Ireland’s trade, travel and tourism and it also looks at the financial implications. Tests are carried out to determine if there is causality between GDP and Employment, and forecasts of the impact of Brexit on both GDP and Employment are estimated. Results show that both Ireland’s GDP and Employment figures will be negatively affected - Ireland’s GDP will fall by over €4 billion by 2020 and up to almost €12 billion by 2030. Projected employment will fall by over 15,000 by 2020 and by over 33,000 by 2030. This is the first forecast of the negative impact of a Brexit on a small open economy like Ireland, and the results and estimates should prove useful for economists and policy makers.