Geoeconomic Fragmentation: Implications for Ireland
Selected Issues Papers, July 8, 2025
Source details
- Canonical URL
- Geoeconomic Fragmentation: Implications for Ireland
Other formats
Bibliographic details
- Authors: Rossen Rozenov, Zhao Zhang
- Published: July 8, 2025
- Series: Selected Issues Papers
- DOI: https://doi.org/10.5089/9798229016766.018
Overview
- Authors: Rossen Rozenov, Zhao Zhang
- Date: July 8, 2025
- Core focus: Assessing the impact of geo-economic fragmentation on Ireland’s economy, which is deeply connected to the global trade network and relies on foreign direct investment (FDI), notably from the US.
- Three channels analyzed:
- Supply chain disruptions
- Trade distortions resulting from tariff increases
- FDI relocation, including driven by tax policy changes
Analytical framework
- Framework designed to estimate impacts via the three channels listed above.
- Emphasis on quantifying effects on value added and the indigenous economy.
Key findings
- Supply chain disruptions:
- Under moderate shock assumptions, the impact of supply disruptions would be relatively contained.
- Trade distortions (tariff increases):
- Under moderate shock assumptions, the impact of higher tariffs would be relatively contained.
- FDI relocation:
- Potential FDI relocations would be associated with a sizeable loss of value added.
- The impact on the indigenous economy from FDI relocations would be more limited.
Policy implications and emphasis
- Monitoring FDI dynamics is critical given the potential for sizeable losses in value added from FDI relocation.
- Policies to mitigate supply chain risk and manage trade distortions remain relevant, though moderate shocks imply contained impacts.
- Tax policy and its role in FDI location decisions merit attention due to their influence on relocation risks.
Content in this bundle
- Sipea2025089