The current issue of the prestigious US magazine Atlantic Monthly devotes five full pages to a short story called I'm From Ballymullet. Irish readers will recognise that the story is based on events a few years ago in Dungarvan, Co Waterford, when a local curate made the sensational, and extremely unlikely claim that several local men had been infected with HIV by a woman home from England.

In I'm From Ballymullet a thinly disguised account of this incident is recounted in the voices of people with names like Molly Hogan, Father Brendan Lenehan, Tiny McGarry, Nollaig Faye and Brendan "Bunny" O'Hanlon. There are appropriate tinges of local colour with references to the Tidy Towns competition, Ireland beating Italy in the World Cup, and the clubs in Leeson Street. This is, for all intents and purposes, an authentic Irish short story.

But it's a fair bet nevertheless that the author, Wendy Mai Rawlings, is not from these parts. Hard as she has tried to apply a convincing sheen of authenticity, there are some tell-tale anomalies. One of the denizens of Ballymullet, for example, talks of putting the milk in "the icebox", whereas real Irish people still have fridges. And it's hardly credible that an Irish priest would claim that "our citizens know nothing of . . . the gays in their parades walking down Fifth Avenue" when gay organisations have been marching without controversy in Saint Patrick's Day parades in Dublin for years.

Something is going on here. Just as most Irish short story writers have left behind the whimsey of local colour and gas characters with funny notions of sex and religion, the virtual Irish short story has arrived. There is, in the US, an established market for a certain kind of fictive Irishness. If the Irish can't or won't supply it, the Americans are willing and able to do it for themselves. As with the authentic Irish pub that is prefabricated in Dublin and re-assembled anywhere from Bangkok to Barcelona, Irish culture no longer has to have anything to do with Ireland.

Irishness currently has a certain cachet in the US, both in high art and in popular culture. This week, a major festival of Irish culture opens in Washington. This week, too, the Tony Award nominations honouring the best of the Broadway theatrical season were announced. They include Shaun Davey for a Broadway musical based on James Joyce's The Dead and Gabriel Byrne, for his performance in Eugene O'Neill's A Moon for the Misbegotten. Over the last two years, the theatre company Druid, playwrights Martin McDonagh and Conor McPherson, and the show Riverdance have all had Broadway success.

In pop art, meanwhile, it might be noted that Irish characters now turn up in sci-fi fantasies and super-hero comics. From Myles O'Brien in Star Trek to Siryn in X-Force, Cassidy in Preacher and Kevin O'Brian in Daredevil and on to the kids' cartoon heroes of The Mystic Knights of Tir na nOg, Irishness has warped into new dimensions. As the huge US sales of John O'Donoghue's book of Celtic spirituality, Anam Cara, and of Enya's ethereal vapourings suggest, New Age enthusiasms have made the magical, mystical Irish marketable. The "authenticity" of much of this can be judged, however, by the fact that Banshee, former member of the X-Men and now guru and guide to the young superheroes of the Generation X comics, is male.

The forces at work can be discerned almost as much in eloquent absences as in the surface events. While the image of Italian culture in the US, whether in the epic saga of The Godfather or in the wry realism of The Sopranos, is still dominated by the Mafia, Irish criminality has had almost no presence in US popular culture since the days of Jimmy Cagney and Pat O'Brien in Angels with Dirty Faces in 1938.

It might be imagined, for example, that Hollywood or US TV companies would have produced a movie or a miniseries about the mob described in 1986 by the current mayor of New York, Rudi Giuliani, as "the most savage organisation in the long history of New York city gangs", especially since this gang, the Westies, flourished in very recent times. But perhaps because its leading members had names like Jimmy Coonan, Richie Ryan, Jimmy McElroy, Tommy Collins and Kevin Kelly, the Westies didn't make it in the Hollywood stakes. Movie gangsters are not Irish, and the Irish in the movies are not gangsters.

Yet, at another level, there is something authentic at work in the oddly displaced notion of Irishness that lies behind the current wave of enthusiasm for it in the US. It may be comforting to think about Irish culture as something pristine and pure being ravished by shallow American commercialism. But this notion is itself just another hollow fiction. For as soon as the words "Irish" and "American" are examined as cultural descriptions, it becomes clear that they are not stable opposites. US culture is itself in part an Irish invention. And Irish culture is inconceivable without America.

What, after all, is American theatre, if not a tradition constructed on foundations laid by Eugene O'Neill, a writer inextricably entangled in the painful and complex psychological heritage of 19th-century Ireland? Who did more to create Broadway than George M. Cohan (Keohane) whose statue stands at the heart of New York's theatre district? Who, if not John Ford, invented the archetypical "authentic" American West? In the weave of European, African and Asian cultures that forms the now-triumphant banner of US art and entertainment, Irish threads are at least as prominent as any other.

And on the other side of the equation, it would be impossible to filter out the US components of modern Irishness. This is true even or perhaps especially of what are considered the most "authentic" or traditional expressions of contemporary Irish culture. Suppose, for example, an uilleann piper or fiddler wants to learn an old tune. The first place to look will be the book that virtually defines the canon of Irish folk tunes, Irish Dance Music: 1001 Gems. Not only, however, was it published in Chicago (in 1907), but the tunes were collected there as well, by the city's Chief of Police, Francis O'Neill. As is the case in many cultures, the Diaspora often proved better at preserving traditional forms than did the home community.

But Irish traditional music also provides an example of a wider reality. In most societies, older cultural forms were slowly adapted to the new world of cities, but remained within the context of a recognisable national tradition. In the case of Irish culture, that process happened primarily abroad and to a large extent in the US.

So if you want to know how Irish country fiddling acquired the speed, variety and individuality that we now associate with a master like Martin Hayes, you have to look to the cities of the US. It was there that Sligo-born emigrants like Michael Coleman, Paddy Killoran and James Morrison developed a 20th-century style for Irish music. That sound, in turn, shaped the traditional music revival in Ireland from the 1970s onwards. What we now regard as one of the most vibrant and distinctive aspects of Irish culture is, in other words, also deeply American.

This is true, in all sorts of ways, of most contemporary art forms. Irish movies owe far more to Hollywood than to the European cinema. The high flyers of Irish poetry have always acknowledged the immense influence of Robert Frost and Robert Lowell, just as younger Irish novelists tend to be saturated in US fiction. The lingering impact of American abstract expressionism on Irish painting is incalculable.

In some extreme cases, specific cultural forms that started out in Ireland have become arguably more American than Irish. It's not, for example, accidental that the dancers who sparked the current revival of Irish dancing, Michael Flatley and Jean Butler, are children of the Irish-American Diaspora. For it has long been the case that north America had more Irish dancers, teachers and feiseanna than Ireland itself. Such is the influence of US-Irish dancing on the form in Ireland that it probably makes more sense, particularly since Riverdance, to reverse the old assumptions and think of Irish dancing in Ireland as an offshoot of a US form.

This immensely tangled relationship can certainly be shallow and fatuous, producing nothing more than commodities for a vastly wealthy marketplace. But it can also, as in, for example, Alice McDermott's magnificently wrenching recent novel, Charming Billy, produce a profound truthfulness. And it certainly can't be understood either through simplistic slogans like "American cultural imperialism" or through patronising smirks at the alleged vacuity of Irish-America.

Now that Ireland itself has become utterly Americanised, the old habit of telling Irish-Americans what we think they want to hear and then sneering at them for believing it has become untenable. Now that the past of the Irish diaspora has become the present of Ireland itself, Irish culture needs to listen and learn as well as to show off and sell.

Arminta Wallace will report from the Island Arts From Ireland festival at Washington's Kennedy Centre next week