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Are high inflation and low growth the effects of Brexit or just a coincidence?

Papadia, Francesco (2018) Are high inflation and low growth the effects of Brexit or just a coincidence? LSE Business Review (02 Jun 2018). Blog Entry.

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Abstract

Ben Bernanke, former president of the US Federal Reserve, recounts an interesting exchange with a US senator on September 24 2008, just after he failure of the Lehman Brothers investment bank (in his book, The Courage to Act). The senator "had spoken to small-town bankers, auto dealers and others in his district with knowledge of the 'real' US economy. So far, he said, they had not seen any meaningful effects of the Wall Street troubles. ‘They will’, I said to him, ‘they will’.” Of course, subsequent developments fully vindicated the “they will, they will” view, as what followed was the most serious economic crisis since the Great Depression. In a post I published in November 2016, I took a view similar to Bernanke’s about the effects of Brexit: while Brexiters back then had noted that income losses were nowhere to be seen, I just suggested to add the two words “so far” to this remark. Now, nearly two years have passed since Brexit and we can ask whether we have started seeing the effects of Brexit on economic activity. Of course, nobody thought Brexit would cause a crisis comparable to the one that followed the failure of Lehman Brothers. Still, it is interesting to detect possible incipient consequences of the June 2016 referendum.

Item Type: Online resource (Blog Entry)
Official URL: http://blogs.lse.ac.uk/businessreview/2018/06/02/a...
Additional Information: © 2018 The Author; Online
Divisions: LSE
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HC Economic History and Conditions
JEL classification: E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Employment, and Investment
E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles
E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates
Sets: Collections > LSE Business Review Blog
Date Deposited: 28 Nov 2018 09:54
Last Modified: 22 Jul 2019 23:16
URI: http://eprints.lse.ac.uk/id/eprint/90869

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