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Brexit and the future of globalisation?

Author

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  • John Van Reenen

Abstract

Alongside the victory of Donald Trump in the 2016 US elections, Britain's vote to leave the European Union ("Brexit") in June 2016 reflects a global upsurge in populism. I find that under all plausible scenarios Brexit will make the average UK household poorer than the alternative of remaining in the European Union. The welfare loss is larger if the UK leaves the Single Market (a "hard Brexit) and larger still (6% to 9% of GDP) when the dynamic effects of productivity losses are factored in. This damage hits the poor as much as the rich and is unlikely to be offset by new trade deals which cannot replicate the sustained reduction in non-tariff barriers that the Single Market has engineered.

Suggested Citation

  • John Van Reenen, 2017. "Brexit and the future of globalisation?," CEP Reports 35, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepsps:35
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    File URL: https://cep.lse.ac.uk/pubs/download/special/cepsp35.pdf
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    More about this item

    Keywords

    brexit; globalization; populism;
    All these keywords.

    JEL classification:

    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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