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Brexit – an economy-wide Impact Assessment looking into trade, immigration, and Foreign Direct Investment

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  • Jafari, Yaghoob
  • Britz, Wolfgang

Abstract

We provide an impact assessment of Brexit along three dimensions: EU market access considering tariffs and non-tariff barriers, impacts of less EU citizen working in the UK and reductions in Foreign Direct Investment. Using a Computable General Equilibrium model integrating the Melitz (2003) framework, we consider capital accumulation and feedback of population size on tax income and demand for public services. In our worst-case scenario with all dimensions considered simultaneously, welfare losses per UK citizen amount to around 1.300 USD, exceeding result of other studies which we link to comprehensive scenario design and applying the Melitz model for manufacturing sectors. Keywords: Brexit, Computable General Equilibrium Modeling, Modern trade theory JEL classification: C68, C63

Suggested Citation

  • Jafari, Yaghoob & Britz, Wolfgang, 2017. "Brexit – an economy-wide Impact Assessment looking into trade, immigration, and Foreign Direct Investment," Conference papers 332923, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
  • Handle: RePEc:ags:pugtwp:332923
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    References listed on IDEAS

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    More about this item

    Keywords

    International Relations/Trade;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques

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