IDEAS home Printed from https://ideas.repec.org/b/ces/ifofob/93.html
   My bibliography  Save this book

Brexit and its Economic Consequences for the German State of Hesse

Author

Listed:
  • Gabriel Felbermayr
  • Robert Lehmann
  • Marina Steininger

Abstract

In the course of Brexit, Germany’s real GDP will fall compared to the current status quo. The average effect for Germany as a whole, however, masks significant heterogeneities between different sub-national entities such as the German states. The German state of Hesse faces a special situation, as Frankfurt am Main lies at the heart of the German financial sector. In sum, the German state of Hesse and the important metropolitan region of Frankfurt-Rhine-Main should be less heavily impacted by Britain’s exit from the European Union than Germany as a whole. In the case of a "hard Brexit", Hessen’s price-adjusted gross domestic product (GDP) will be -0.17% lower than in the base scenario (versus Germany: -0.23%). The effects on the metropolitan region will be similar to that on Hessen as a whole. If, on the other hand, a more ambitious free trade agreement were to be reached ("soft Brexit"), the effects on Hessen and its metropolitan region would be -0.08% compared to the baseline (Germany: -0.10%). Hessen stands to be less strongly affected thanks to structural economic differences in its economy. There are two main reasons for this: firstly, the branch that stands to be the most strongly affected by Brexit, namely manufacturing, accounts for a smaller share of added value in Hessen than in Germany as a whole. Secondly, financial, insurance and corporate services provides are traditionally more present in Hessen than in Germany on average. These are the three economic sectors that may even stand to gain from Brexit.

Suggested Citation

  • Gabriel Felbermayr & Robert Lehmann & Marina Steininger, 2018. "Brexit and its Economic Consequences for the German State of Hesse," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 93.
  • Handle: RePEc:ces:ifofob:93
    as

    Download full text from publisher

    File URL: https://www.ifo.de/DocDL/ifo_Forschungsberichte_93_2018_Felbermayr_Auswirkungen_Brexit_auf_Hessen.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Head, Keith & Mayer, Thierry, 2014. "Gravity Equations: Workhorse,Toolkit, and Cookbook," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 131-195, Elsevier.
    2. Gabriel Felbermayr & Jasmin Katrin Gröschl & Inga Heiland & Martin Braml & Marina Steininger, 2017. "Ökonomische Effekte eines Brexit auf die deutsche und europäische Wirtschaft," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 85.
    3. Gabriel Felbermayr & Clemens Fuest & Jasmin Katrin Gröschl & Daniel Stöhlker, 2017. "Economic Effects of Brexit on the European Economy," EconPol Policy Reports 4, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    4. Wen Chen & Bart Los & Philip McCann & Raquel Ortega‐Argilés & Mark Thissen & Frank van Oort, 2018. "The continental divide? Economic exposure to Brexit in regions and countries on both sides of The Channel," Papers in Regional Science, Wiley Blackwell, vol. 97(1), pages 25-54, March.
    5. 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.
    6. Gopinath, G. & Helpman, . & Rogoff, K. (ed.), 2014. "Handbook of International Economics," Handbook of International Economics, Elsevier, edition 1, volume 4, number 4.
    7. Rahel Aichele & Gabriel Felbermayr & Inga Heiland & Gabriel J. Felbermayr, 2014. "Going Deep: The Trade and Welfare Effects of TTIP," CESifo Working Paper Series 5150, CESifo.
    8. Gabriel Felbermayr & Rahel Aichele & Inga Heiland, 2016. "Going Deep: The Trade and Welfare Effects of TTIP Revised," ifo Working Paper Series 219, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Patrick Bisciari, 2019. "A survey of the long-term impact of Brexit on the UK and the EU27 economies," Working Paper Research 366, National Bank of Belgium.
    2. Gabriel Felbermayr & Clemens Fuest & Jasmin Katrin Gröschl & Daniel Stöhlker, 2017. "Economic Effects of Brexit on the European Economy," EconPol Policy Reports 4, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    3. Gabriel Felbermayr & Marina Steininger, 2017. "Effekte der US-Präsidentschaft Trump – Neuer Protektionismus," FIW Policy Brief series 037, FIW.
    4. Gabriel Felbermayr & Marina Steininger & Erdal Yalcin, 2017. "Global Impact of a Protectionist U.S. Trade Policy," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 89.
    5. Felbermayr Gabriel & Steininger Marina, 2019. "Revisiting the Euro’s Trade Cost and Welfare Effects," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 239(5-6), pages 917-956, October.
    6. Harald Oberhofer & Michael Pfaffermayr & Yvonne Wolfmayr, 2021. "Die Auswirkungen des Brexit auf Österreichs Wirtschaft," WIFO Studies, WIFO, number 66782, June.
    7. Iliev, Dragomir & Stefanov, Galin & Yotov, Yoto, 2016. "Estimating Bulgaria’S Trade Borders With The Eu An Application Of The Empirical Gravity Model Of Trade," Business Management, D. A. Tsenov Academy of Economics, Svishtov, Bulgaria, issue 4, pages 1-3.
    8. Holger Breinlich & Elsa Leromain & Dennis Novy & Thomas Sampson, 2021. "Import liberalization as export destruction? Evidence from the United States," CEP Discussion Papers dp1779, Centre for Economic Performance, LSE.
    9. Rachel Griffith & Peter Levell & Agnes Norris Keiller, 2020. "Potential consequences of post-Brexit trade barriers for earnings inequality in the UK," IFS Working Papers W20/27, Institute for Fiscal Studies.
    10. Anderson, James E. & Yotov, Yoto V., 2020. "Short run gravity," Journal of International Economics, Elsevier, vol. 126(C).
    11. Aichele Rahel & Felbermayr Gabriel J. & Heiland Inga, 2016. "TTIP and Intra-European Trade: Boon or Bane?," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 236(6), pages 639-664, December.
    12. Halmai, Péter, 2020. "A dezintegráció gazdaságtana. A brexit esete [The economics of disintegration. The case of Brexit]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(9), pages 837-877.
    13. Giammetti, Raffaele, 2019. "Tariffs, Domestic Import Substitution and Trade Diversion in Input-Output Production Networks: how to deal with Brexit," MPRA Paper 93229, University Library of Munich, Germany.
    14. Benedikt Heid & Mario Larch & Yoto V. Yotov, 2021. "Estimating the effects of non‐discriminatory trade policies within structural gravity models," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 54(1), pages 376-409, February.
    15. Gouel, Christophe & Jean, Sébastien, 2023. "Love of variety and gains from trade," European Economic Review, Elsevier, vol. 158(C).
    16. Peter H. Egger & Katharina Erhardt, 2024. "Heterogeneous effects of tariff and nontariff trade‐policy barriers in quantitative general equilibrium," Quantitative Economics, Econometric Society, vol. 15(2), pages 453-487, May.
    17. Felbermayr, Gabriel & Kimura, Fukunari & Okubo, Toshihiro & Steininger, Marina, 2019. "Quantifying the EU-Japan Economic Partnership Agreement," Journal of the Japanese and International Economies, Elsevier, vol. 51(C), pages 110-128.
    18. Gabriel Felbermayr & Jasmin Katrin Gröschl & Inga Heiland & Martin Braml & Marina Steininger, 2017. "Ökonomische Effekte eines Brexit auf die deutsche und europäische Wirtschaft," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 85.
    19. Felbermayr, Gabriel & Yotov, Yoto V., 2021. "From theory to policy with gravitas: A solution to the mystery of the excess trade balances," European Economic Review, Elsevier, vol. 139(C).
    20. Kohler Wilhelm & Jung Benjamin, 2017. "Wie vorteilhaft ist internationaler Handel?: Ein neuer Ansatz zur Vermessung der Gewinne," Perspektiven der Wirtschaftspolitik, De Gruyter, vol. 18(1), pages 32-55, April.

    More about this item

    JEL classification:

    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ces:ifofob:93. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Klaus Wohlrabe (email available below). General contact details of provider: https://edirc.repec.org/data/ifooode.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.