Dr. Kieran McQuinn:

It would probably be on the revenue expenditure side. I had not thought of it in respect of other ways. It is something that has to be borne in mind in respect of the likely future path of the key fiscal metrics such as the deficit, the debt to gross domestic product, GDP, and the gross national income (Star), GNI*, metrics. It is something that would have to be taken into consideration. We would also note that, while calling for increased expenditure on social housing - and there was a significant increase in the last year in the recent budget - there is also the additional problem with the economy growing at a very strong rate. A balancing act has to be achieved. We do not want to overheat the economy with the State spending a particularly large amount and increasing the level of expenditure. Those are two risks in this context. The point is well made in general, however, that, ideally, if the State can increase its provision of housing, where there is a slowdown in the private sector, I think that would be a desired outcome.

Regarding the issue of whether we would have expected more on this in respect of dealing with policymakers, in general, we are a little surprised. We carried out the initial macroeconomic assessment using the range of models we use to perform analysis. I referred to the results at the start and there have not been more since then.

In part we can blame the lack of concrete policy proposals from the negotiations, by which everybody has been struck. There has been very little in the way of tangible and realistic policy proposals that have emerged and which we could consider. On Deputy Barry's point, it is something at which we certainly could look. We have the models to examine house prices and housing supply, as well as the impact of reducing income levels and higher employment rates. We did an extensive amount of work recently in considering affordability across the property market and could factor in those issues in looking at the implications for affordability if income levels fall, unemployment rates increase or even if there is some impact, for example, on interest rates. We can certainly answer such questions right now, although it is difficult off the top of my head to indicate specific impacts on the key variables.

If there is a no-deal Brexit and the United Kingdom simply crashes out of the European Union, we will have to hold up our hands and say it will be very difficult. Economic models have strengths, but often they are estimated in periods of relative calm and stability. We are used to answering such questions in that context. When we get into a position that nobody has anticipated or there is a dramatic series of events where British aeroplanes cannot land on the Continent or the ports are closed, for example, economic models will not be very relevant. That is an extreme set of circumstances that I hope will not come to pass.

A relevant point was made about the rest of the country and Brexit. Colleagues of ours in the institute specifically examined regional matters. It is work by Dr. Martina Lawless and Professor Edgar Morgenroth. The different sectoral implications of Brexit are very significant and the agricultural and related food processing sector will be particularly affected, especially if there is a scenario involving rules akin to those used under the World Trade Organization. In that case, it is interesting to examine the areas of the country that are very heavily reliant on agricultural income and the agriculture sector. As we know, the south west is very heavily reliant on agriculture, including places such as north Cork, south Tipperary and across that part of the world. These areas and regions are likely to see a particular impact, as well as Border locations because of their heavy reliance on cross-Border trade, of which agricultural trade is a part. There could well be key regional differences.

We made the point in the opening statement that, overall, there could be a depressing effect on the national housing market if there were particularly high levels of inward migration to Dublin because of issues related to the financial sector in London or elsewhere in the United Kingdom, for example. There could be anomalies whereby the Dublin market would be quite different in terms of the overall impact versus the rest of the housing market outside Dublin. It would probably stretch to the cities generally, including Cork, Limerick and Waterford. The impact for those cities would be somewhat different from that in the surrounding regions.