It has become consensus to argue that we have approached ‘peak trade’ or the ‘end of globalisation’: that the past five years of stagnant global trade growth are not temporary, but instead reflect persistent forces that are likely to drive a continued stagnation in global trade over the long run. Though this view preceded the Brexit referendum, this column argues that it has now been amplified by the UK’s vote to leave the EU and the prospect that, potentially, US President-elect Trump and other leaders across developed markets will implement protectionist trade policies. The authors consider the arguments for ‘peak trade’, and conclude that, though downside risks to the trade outlook are prominent, there is little evidence – yet – that the current stagnation in global trade is predestined to extend far into the future.
Ian Tomb, Kamakshya Trivedi, 06 January 2017
Jonathan Portes, Giuseppe Forte, 05 January 2017
The various projections of the impact of Brexit on the UK economy that were produced during the referendum campaign omitted the economic impact of changes in migration to the UK. This column presents plausible scenarios for future migration flows and estimates of the likely impacts. The potential negative impact of Brexit-induced reductions in openness to migration on the UK economy could well equal that resulting from Brexit-induced reductions in trade.
Fredrik Andersson, Lars Jonung, 15 December 2016
A recent Vox eBook examined the potential issues facing various EU members when it comes to negotiating with the UK over Brexit. This column, taken from the ebook, argues that Sweden should work for a happy divorce that lays the foundation for a remarriage, or 'Brentry'. As part of this, the authors advocate a temporary escape clause concerning the free movement of labour, which any member state can invoke when and only when they can prove that EU migration is directly harming a significant part of domestic society.
Laurence Boone, Ano Kuhanathan, 12 December 2016
A recent Vox eBook examined the potential issues facing various EU members when it comes to negotiating with the UK over Brexit. This column, taken from the ebook, suggests that France is likely to seek to include the UK in a comprehensive free trade zone to maintain easy access to the UK markets, but with a view to safeguarding its own competitiveness.
Francesco Furlanetto, Ørjan Robstad, 10 December 2016
The macroeconomic effects of immigration are a hot topic, particularly during elections. Using immigration records from Norway, this column argues that an increase in immigration lowers unemployment (even for native workers) and has no negative effects on public finances. However, it identifies a negative effect on productivity that may be a worry for long-term growth.
Luis Garicano, 07 December 2016
A recent Vox eBook examined the potential issues facing various EU members when it comes to negotiating with the UK over Brexit. This column, taken from the eBook, examines Spain's negotiating position, including the possible stumbling block of Gibraltar.
Beatrice Weder di Mauro, 06 December 2016
A recent Vox eBook examined the potential issues facing various EU members when it comes to negotiating with the UK over Brexit. This column, taken from the eBook, focuses on Germany and argues that as the country's prosperity is inseparable from the success of Europe and the Eurozone, Germany's priority has to be to preserve both and to avoid corrosive, possibly divisive or even destructive compromises with a country that wants to leave.
Italo Colantone, Piero Stanig, 23 November 2016
The vote for Brexit was a watershed moment in European politics. This column investigates the causal drivers of differences in support for the Leave campaign across UK regions. Globalisation in the form of the ‘Chinese import shock’ is found to be a key driver of regional support for Brexit. The results suggest that policies are needed that help to redistribute the benefits of globalisation across society.
Ashoka Mody, 18 November 2016
Between the first quarter of 2013 and the end of 2015, London property prices rose rapidly, the exchange rate appreciated, and the current account deficit widened. This column argues that the rise of the pound was in fact a financial bubble, riding on a property price-exchange rate carry trade.This unsustainable bubble was deflated by Brexit.
Keith Head, Thierry Mayer, 12 November 2016
Unlike technical progress in transport or communication technologies, regional trade agreements are political decisions that can be reversed, as Brexit and the campaign promises of President-elect Donald Trump to raise tariffs on imports from Mexico demonstrate. This column analyses the consequences for the car industry of these two examples of the dismantling of an RTA. Car production would fall significantly in the UK under Brexit and in Mexico under ‘Trumpit’ due to a combination of tariff-induced sales losses and increased plant costs.
Francesco Fasani, 31 October 2016
The migration debate is often harsh and polarised, oscillating from calls for more open borders to promises to build new fences, and contrasting the views of those who emphasise the advantages and benefits from migration flows with those who consider migrants to impose an unnecessary strain on hosting societies. This column introduces a new eBook that offers a brief summary of what economists have learnt about migration in several crucial areas of policymaking, and identifies most of the important questions that still remain to be answered.
Sascha O. Becker, Thiemo Fetzer, Dennis Novy, 31 October 2016
In the Brexit referendum on 23 June 2016, the British electorate voted to leave the EU. The vote is widely seen as a watershed moment in British history and European integration. This column asks why some areas vote to leave the EU, and others voted to remain.
Charles Wyplosz, 24 October 2016
With Britain’s exit from the EU edging ever closer, so too are the negotiations. So far the focus has been on the future position of the UK. Now the time comes for the remaining 27 member states to understand the implications for them, and to establish a strategy for the EU. This column introduces a new eBook aimed at contributing to the extraordinary challenges that lie ahead.
Nauro Campos, Corrado Macchiarelli, 19 October 2016
Explanations for the Eurozone Crisis rely on the notion of cross-country asymmetries. The core-periphery pattern to the EU was first established by Bayoumi and Eichengreen in 1993, prior to the Eurozone. This column replicates their approach to explore whether the euro has strengthened or weakened this pattern. A new ‘coreness index’ indicates that the core-periphery pattern has weakened, and that a new, smaller periphery has emerged.
Richard Tol, 27 September 2016
The UK may opt to leave the EU Emissions Trading System. This column argues that as the UK is a large importer of emission permits, this would make meeting its climate policy targets much harder and dearer, and would remove the legal standing of many permits circulating in the rest of the EU. Some non-EU countries do take part in the Emissions Trading System, and this appears to be the best option for the UK post-Brexit. If not, the UK Government will be forced into a major overhaul of its climate policy.
Gylfi Zoega, 01 September 2016
Britain’s decision to leave the EU surprised many. This column examines the relationship between economic prosperity and voting behaviour in the referendum. The regions that have benefitted most from immigration and trade voted most strongly in favour of remaining, while the regions where people feel most threatened voted to leave. In other countries fearing a similar EU exit, economic policy should aim to ensure that the gains from trade and immigration are as widespread as possible.
Avinash Persaud, 26 August 2016
The vote for Brexit was seen by some as a vote of ignorance, laced with xenophobia. This column argues that it was not an irrational vote of the ignorant, but a highly rational vote by the same losers from trade as elsewhere across the world. To compensate them, efforts should be made to upskill displaced workers and build them affordable homes to rent in places where the new jobs are. Ignoring this rise of trade nationalism would be far more dangerous than leaving the EU.
Lars Feld, Christoph Schmidt, Isabel Schnabel, Volker Wieland, 22 August 2016
It has been suggested that the vote for Brexit marks the first step of disintegration in Europe. This column argues that if the European integration process is pursued wisely, it still carries the promise of enduring peace and growing prosperity. But EU policymakers must devise a process of integration that strengthens Europe’s competitiveness to such an extent that the advantages of EU membership are clear to member states’ citizens.
Brian Bell, 17 August 2016
Wage inequality was partly behind the vote for Brexit. In this video, Brian Bell argues that the consequences of Brexit should be evaluated across the income distribution. This video is part of the “Econ after Brexit” series organised by CEPR and was recorded on 14 July 2016.
Brian Bell, Stephen Machin, 16 August 2016
Wage inequality was partly behind the vote for Brexit. This column shows how areas with relatively low median wages were substantially more likely to vote ‘Leave’, and discusses the likely implications of Brexit for wage inequality in the future. Increased likelihood of a recession, a negative shock to trade, reduced migration flows, and the possible loss of passporting rights for the City will all alter the structure of wages in ways that will need to be carefully monitored and studied in due course.