Exchange rates and trade: the case of Irish exports to Britain

This paper examines the effect of changes in the Punt/Sterling exchange rat e on exports from Ireland to Britain. The approach used here differs signif icantly from that used in most other studies in that the long-run neutralit y of the Punt/Sterling exchange rate with regard to exports from Ireland to Britain is tested using a recently developed technique. There is strong ev idence that the exchange rate is neutral in the long run.