Ireland's Trading Potential with Central and Eastern European Countries: A Gravity Study

Marius Brülhart and Mary Kelly
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Mary Kelly: Postal: Department of Economics, Trinity College, Dublin 2, Ireland

Economics Technical Papers from Trinity College Dublin, Economics Department

Abstract: Using a gravity model, we estimate the magnitude of potential trade flows between Ireland and the five CEEC countries currently negotiating accession to the EU. We find that Irish exports were already close to their "normal" level in 1994, but that imports from the CEECs were still only half of their "normal" size. The value of estimated "normal" trade corresponds to 0.8 percent of Irish GNP. The actual share in 1994 was 0.5 percent. EU enlargement would raise Ireland-CEEC trade to 1.2 percent of GNP. The short-term scope for trade expansion therefore appears to be modest. Stronger potential for trade growth emerges in the "long-term" scenario, which assumes partial income convergence of the EU and the CEECs. According to our upper-limit estimate in the convergence scenario, the value of Irish trade with the CEECs could reach 7.7 percent of Irish GNP in 2020.

JEL-codes: C21 F14 F15 F17 (search for similar items in EconPapers)
Date: 1998
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Citations: View citations in EconPapers (3)

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Journal Article: Ireland’s Trading Potential with Central and Eastern European Countries - A Gravity Study (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:tcd:tcduet:9815

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