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.
Jonathan Portes, Giuseppe Forte, 05 January 2017
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.
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.
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.
Patrick Honohan, John FitzGerald, 12 August 2016
As the Irish economy is deeply integrated with the UK’s economy, Brexit poses especially severe challenges for Ireland. This column considers a future in which the legal basis for the UK’s economic relations with the EU, and hence with Ireland, is thrown into doubt. A UK withdrawal from the Single Market would raise questions relating to trade ‘re-diversion’, foreign direct investment, the Irish peace agreement, and assured access to British natural gas supplies.
Jonathan Portes, 11 August 2016
Free movement of workers within the EU is an essential principle of the EU. In this video, Jonathan Portes discusses the impact of Brexit on UK immigration. This video is part of the “Econ after Brexit” series organised by CEPR and was recorded on 14 July 2016.
Jonathan Portes, 11 August 2016
Immigration was a major factor – perhaps the major factor – in the Brexit vote. This column asks what the result of the referendum means for the UK’s immigration policy. It looks likely that the UK’s negotiating position may coalesce around an ‘EEA minus’ arrangement. While free movement would not continue as now, this would not imply moving to a system that gives effectively equal treatment to EU and non-EU nationals; there would still be a considerable degree of preference for the former. The negotiations would likely be legally, economically, and politically complex, but this does not mean that it is not worth trying.
Michael McMahon, 10 August 2016
The UK’s membership of the EU has been a key factor behind the City of London’s emergence as a leading global financial centre. This column looks at the implications of Brexit for the City. While it is unlikely that many banks or other financial institutions will simply up and leave in the coming months, their expansion and hiring decisions may lean toward the remaining EU member states for some of their operations. And unless the politicians conducting the Brexit negotiations do their utmost to limit the damage, the loss of passporting rights is likely to have a significant negative impact on the UK financial sector.
Patricia Jackson, 08 August 2016
Would losing passporting really be a crisis for the City? Or could the finance sector find a way around newly-imposed restrictions? Bob Denham (Econ Films) asks Patricia Jackson (Atom, Ernst & Young) about the attractiveness of London, the likelihood of a mass exodus and the future of British finance.
Patricia Jackson, 09 August 2016
The Brexit vote has created particular uncertainty for London, the EU’s largest financial centre. This column looks at the issues facing the UK’s banking sector in the wake of the referendum: the right to conduct cross-border activity in the EU in future, the impact on flexible recruitment in London, the possibility of diverging UK and EU regulation, and the effect on bank profitability more widely across Europe.
Jim Rollo, Alan Winters, 09 August 2016
For over four decades, the EU has managed most international trade policy on behalf of the UK. After Brexit, the UK government will have to reconstitute trade links with EU, with third nations while disentangling the UK from the commitments that the EU made on its behalf in the WTO. This chapter suggests some strategies for the UK government to follow in reconstituting its trade policy. The watch words should be simplicity and cooperation. Maintaining the goodwill of trading partners will be a very high diplomatic priority.
Nicholas Crafts, 08 August 2016
Joining the EU raised the level of UK real GDP significantly. This column suggests that leaving the EU will very probably have a negative effect on UK GDP, but history does not tell us how strong this effect will be. However, history does suggest that the notion that there will be a faster rate of long-run trend growth facilitated by Brexit is not persuasive. The obstacles to better supply-side policy are, as ever, to be found in Westminster not in Brussels.
Simon Evenett, 08 August 2016
The UK must now formulate and execute an independent trade policy for the first time in over 40 years. This column summarises the catalogue of failure that has been the governance of the world trading system in the 21st century, and proposes Ten Commandments to guide UK trade ministers in the forthcoming negotiations.
Kevin O'Rourke, 07 August 2016
After the Brexit vote, it is obvious to many that globalisation in general, and European integration in particular, can leave people behind – and that ignoring this for long enough can have severe political consequences. This column argues that this fact has long been obvious. As the historical record demonstrates plainly and repeatedly, too much market and too little state invites a backlash. Markets and states are political complements, not substitutes
Swati Dhingra, Thomas Sampson, 06 August 2016
Several models exist for the UK's relationship with the EU following Brexit. This column argues that from an economic perspective, joining the European Economic Area and retaining access to the Single Market is the best available option. However, given the importance the new UK government – and at least part of the UK public – attaches to imposing controls on immigration from the EU, this option may not be politically viable. The question the UK must address as it debates the aftermath of Brexit is whether the costs of the alternative are a price worth paying.
Angus Armstrong, 03 August 2016
There are three trade policy challenges facing the UK outside the EU: it must negotiate a new relationship with the EU, disentangle itself from WTO Agreements it entered into as an EU member, and restore preferential trade with the many dozens of trade partners that are now covered by EU trade agreements. As difficult trade-offs are inevitable in all of these, politicians should decide how the preferences of UK citizens might best map onto these alternative arrangements. This column argues that the optimal solution is to combine future trade arrangements with domestic policies that compensate UK citizens who face the costs of trade agreements.
David Vines, 15 July 2016
Whatever happens as a result of the UK’s referendum on EU membership, those in British politics, and in the British Civil Service, now face an enormous task. This column suggests how their hard work might actually lead to an outcome in which the UK remains a member of the EU. It describes a four-part action plan for those who would like to see this possibility kept open.
Richard Baldwin, 12 July 2016
The UK’s referendum on membership of the European Union is now history. But looking forward, it is useful to see how economists entered the debate. This column covers the highlights of VoxEU’s pre-Brexit efforts to disseminate research findings to a wider audience. It is, in a sense, a ‘playlist’ of pre-referendum columns and Vox Videos.
John Springford, 14 June 2016
To the EU’s critics, the cost of regulations emanating from Brussels have become so great that they outweigh the – as they see it – modest benefits of single market membership. In this video, John Springford (CER) tests this claim against the evidence. He points out that the EU’s regulations and directives reduce the cost of trade between member-states – and that critics fail to take that into account. This video was recorded in June 2016 during the “Economics of the UK-EU Relationship” workshop at Brunel University London.
Corrado Macchiarelli, 14 June 2016
The history of European integration has been characterized by several ‘stops-and-goes’ with considerable support on political grounds. In this video, Corrado Macchiarelli (Brunel) discusses the role of European integration for the future of the EU-UK relations. Integration, consistent with the idea of ‘completing’ the European Monetary Union (hence, a ‘Genuine Economic and Monetary Union’- GEMU) would affect the UK as well, irrespective of whether it will withdraw from the EU. Costs and benefits of EU membership should hence take GEMU into account. This video was recorded in June 2016 during the “Economics of the UK-EU Relationship” workshop at Brunel University London.