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Economic effects of Brexit on the German and European economy - updated estimation considering current developments

Author

Listed:
  • Lisandra Flach
  • Gabriel Felbermayr
  • Rolf Langhammer
  • Jasmin Gröschl
  • Katrin Kamin
  • Feodora Teti
  • Sonali Chowdhry
  • Marina Steininger
  • Lena Wiest
  • Gabriel J. Felbermayr

Abstract

This study aims to quantify the economic effects of the United Kingdom’s (UK) exit from the European Union (EU) on the German and European economy. It first described the changes in the economic relations between the UK and the EU since the Brexit referendum in 2016 and puts current developments and possible scenarios into their economic context. The ifo simulation model is then used to quantify the economic effects of either a hard or soft Brexit on the German and European economy. In both scenarios, there will be negative effects on the real GDP of Germany, the UK and the remaining EU member states, on the exports of the German goods industry, as well as changes of sectoral value creation leading to negative effects especially for the automobile industry and service sector.

Suggested Citation

  • Lisandra Flach & Gabriel Felbermayr & Rolf Langhammer & Jasmin Gröschl & Katrin Kamin & Feodora Teti & Sonali Chowdhry & Marina Steininger & Lena Wiest & Gabriel J. Felbermayr, 2022. "Economic effects of Brexit on the German and European economy - updated estimation considering current developments," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 131, July.
    • Handle: RePEc:ces:ifofob:131
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    References listed on IDEAS

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    1. Hylke Vandenbussche & William Connell & Wouter Simons, 2022. "Global value chains, trade shocks and jobs: An application to Brexit," The World Economy, Wiley Blackwell, vol. 45(8), pages 2338-2369, August.
    2. Marcel P. Timmer & Erik Dietzenbacher & Bart Los & Robert Stehrer & Gaaitzen J. Vries, 2015. "An Illustrated User Guide to the World Input–Output Database: the Case of Global Automotive Production," Review of International Economics, Wiley Blackwell, vol. 23(3), pages 575-605, August.
    3. Steinberg, Joseph B., 2019. "Brexit and the macroeconomic impact of trade policy uncertainty," Journal of International Economics, Elsevier, vol. 117(C), pages 175-195.
    4. Alessandro Sforza & Marina Steininger, 2020. "Globalization in the Time of Covid-19," CESifo Working Paper Series 8184, CESifo.
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