Cross-Border Trade Fictions: The Effect of Negotiation Commitments on Ireland’s Response to Brexit

Michael O'Grady
Additional contact information
Michael O'Grady: Central Bank of Ireland

No 2/RT/25, Research Technical Papers from Central Bank of Ireland

Abstract: Employing an augmented version of the synthetic control method, we estimate the effects of the Brexit vote shock and Irish border guarantees on trade patterns between Ireland and the UK, relative to other euro area economies. We let a matching algorithm determine a combination of comparison economies that best resembles the path of Irish bilateral trade with the UK before (i) the Brexit referendum and (ii) guarantees from both the UK and the EU to deliver a “no-border solution” to the island of Ireland. The differences between imports and exports for Ireland and its synthetic doppelganger represent this commitment to a “no-border solution” between Northern Ireland and the Irish Republic, mitigating the negative effects of the Brexit vote shock on bilateral Irish-UK trade. We show that, contrary to the prevailing narrative, Irish imports and exports did not respond to the uncertainty surrounding the Brexit vote to the same extent as other euro area member countries

Keywords: Brexit; European Union; Synthetic Control Methods; Trade Policy Uncertainty; Globalization. (search for similar items in EconPapers)
JEL-codes: E65 F13 F42 F68 (search for similar items in EconPapers)
Date: 2025-02
New Economics Papers: this item is included in nep-eec
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.centralbank.ie/docs/default-source/pub ... df?sfvrsn=d8f5651a_6 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cbi:wpaper:2/rt/25

Access Statistics for this paper

More papers in Research Technical Papers from Central Bank of Ireland Contact information at EDIRC.
Bibliographic data for series maintained by Fiona Farrelly ().