Born, Benjamin, Müller, Gernot J., Schularick, Moritz and Sedlacek, Petr (2017) The economic consequences of the Brexit Vote. CFM Discussion Paper Series (CFM-DP2017-38). Centre For Macroeconomics, London, UK.
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Abstract
This paper introduces a data-driven, transparent and unbiased method to calculate the economic costs of the Brexit vote in June 2016. We let a matching algorithm determine a combination of comparison economies that best resembles the growth path of the UK economy before the Brexit referendum. The economic cost of the Brexit vote is the difference in output between the UK economy and and its synthetic doppelganger. We show that, contrary to public perception, by the third quarter of 2017 the economic costs of the Brexit vote are already 1.3% of GDP. The cumulative costs amount to almost 20 billion pounds and are expected to grow to more than 60 billion pounds by end-2018. We provide evidence that heightened policy uncertainty has already taken a toll on investment and consumption.
| Item Type: | Monograph (Discussion Paper) |
|---|---|
| Official URL: | http://www.centreformacroeconomics.ac.uk/Discussio... |
| Additional Information: | © 2017 The Authors |
| Divisions: | Centre for Macroeconomics |
| Subjects: | H Social Sciences > HA Statistics H Social Sciences > HB Economic Theory J Political Science > JN Political institutions (Europe) |
| JEL classification: | E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy Formation, Macroeconomic Aspects of Public Finance, Macroeconomic Policy, and General Outlook > E65 - Studies of Particular Policy Episodes F - International Economics > F1 - Trade > F13 - Commercial Policy; Protection; Promotion; Trade Negotiations; International Trade Organizations F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F42 - International Policy Coordination and Transmission |
| Date Deposited: | 13 Mar 2018 09:28 |
| Last Modified: | 11 Dec 2024 19:26 |
| URI: | http://eprints.lse.ac.uk/id/eprint/87174 |
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