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Brexit and its possible implications for the UK economy and its regions: A post‐Keynesian perspective

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  • John S.L. McCombie
  • Marta R.M. Spreafico

Abstract

This paper discusses the implications of Brexit for both the UK and its regions, as the latter depends on the former. We concentrate on the forecasts by Her Majesty's Treasury (HMT), the Cambridge Centre for Business Research and the Economists for Brexit. It is argued that the estimates of HMT of the loss of GDP are likely to be overstated, but, nevertheless, there will probably be a fall in output. Given this, the effect on the UK regions is analysed using the regional balance‐of‐payments constrained growth model. This suggests that Brexit will cause regional disparities to widen. Este artículo discute las implicaciones de Brexit para el Reino Unido y sus regiones, ya que estas últimas dependen del Reino Unido. El artículo se concentra en los pronósticos del Tesoro de Su Majestad (HMT, por sus siglas en inglés), del Cambridge Center for Business Research y de Economists for Brexit. Aunque se argumenta que es probable que las estimaciones de HMT de la pérdida del PIB sean exageradas, en cualquier caso es probable que haya una caída en la producción. Debido a esto, se analizó el efecto sobre las regiones del Reino Unido mediante el modelo de crecimiento restringido de la balanza regional de pagos. Esto sugiere que Brexit causará una ampliación de las disparidades regionales. 本稿では、地域が国に依存しているものとして、イギリスとその地域の双方にとってのブレグジッド(Brexit:イギリスのEU離脱)の意義を考察する。本稿では、女王陛下の大蔵省(Her Majesty's Treasury:HMT)、ケンブリッジ大学ビジネスリサーチセンター、Economists for Brexitの予測結果に絞って注目する。HMTが推算したGDPの損失額は過大であると言われているが、それでもやはり、ほぼ間違いなく生産が減少すると考えられる。これを踏まえて、地域のbalance‐of‐payments constrained growth model(国際収支制約成長モデル)を用いてイギリスの地域に対する影響を分析する。結果からブレグジッドは地域格差を更に拡大することが示唆される。

Suggested Citation

  • John S.L. McCombie & Marta R.M. Spreafico, 2018. "Brexit and its possible implications for the UK economy and its regions: A post‐Keynesian perspective," Papers in Regional Science, Wiley Blackwell, vol. 97(1), pages 133-149, March.
  • Handle: RePEc:bla:presci:v:97:y:2018:i:1:p:133-149
    DOI: 10.1111/pirs.12338
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    Cited by:

    1. Blackaby, David H. & Drinkwater, Stephen & Robinson, Catherine, 2020. "Regional Variations in the Brexit Vote: Causes and Potential Consequences," IZA Discussion Papers 13579, Institute of Labor Economics (IZA).
    2. Yao, Hongxing & Memon, Bilal Ahmed, 2019. "Network topology of FTSE 100 Index companies: From the perspective of Brexit," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 523(C), pages 1248-1262.

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