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The Local Economic Effects of Brexit

Author

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  • Swati Dhingra
  • Stephen Machin
  • Henry G. Overman

Abstract

This paper studies the local impacts of the increases in trade barriers associated with Brexit. Predictions of the local impact of Brexit are presented under two different scenarios, soft and hard Brexit. Average effects are predicted to be negative under both scenarios, and more negative under hard Brexit. The spatial variation in shocks across areas is somewhat higher under hard Brexit because some local areas are particularly specialised in sectors that are predicted to be badly hit by hard Brexit. Areas in the South of England, and urban areas, are predicted to be harder hit by Brexit under both scenarios. Again, this pattern is explained by the fact that those areas are specialised in sectors that are predicted to be badly hit by Brexit. Finally, the areas that were most likely to vote remain are those that are predicted to be most negatively impacted by Brexit.

Suggested Citation

  • Swati Dhingra & Stephen Machin & Henry G. Overman, 2017. "The Local Economic Effects of Brexit," CEP Brexit Analysis Papers 10, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepbxt:10
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    Cited by:

    1. Rachel Griffith & Peter Levell & Agnes Norris Keiller, 2021. "Potential Consequences of Post‐Brexit Trade Barriers for Earnings Inequality in the UK," Economica, London School of Economics and Political Science, vol. 88(352), pages 839-862, October.
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    3. Mark Thissen & Frank van Oort & Philip McCann & Raquel Ortega-Argilés & Trond Husby, 2020. "The Implications of Brexit for UK and EU Regional Competitiveness," Economic Geography, Taylor & Francis Journals, vol. 96(5), pages 397-421, October.
    4. 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).
    5. Vijay Victor & Joshy Joseph Karakunnel & Swetha Loganathan & Daniel Francois Meyer, 2021. "From a Recession to the COVID-19 Pandemic: Inflation–Unemployment Comparison between the UK and India," Economies, MDPI, vol. 9(2), pages 1-19, May.
    6. Kitty Stewart & Kerris Cooper & Isabel Shutes, 2019. "What does Brexit mean for social policy in the UK? An exploration of the potential consequences of the 2016 referendum for public services, inequalities and social rights," CASE - Social Policies and Distributional Outcomes Research Papers 03, Centre for Analysis of Social Exclusion, LSE.
    7. Swati Dhingra & Thomas Sampson, 2022. "Expecting Brexit," Annual Review of Economics, Annual Reviews, vol. 14(1), pages 495-519, August.
    8. Di Iasio, Valentina & Wahba, Jackline, 2023. "Expecting Brexit and UK migration: Should I go?," European Economic Review, Elsevier, vol. 157(C).
    9. Leonie Wenz & Anders Levermann & Sven Norman Willner & Christian Otto & Kilian Kuhla, 2020. "Post-Brexit no-trade-deal scenario: Short-term consumer benefit at the expense of long-term economic development," PLOS ONE, Public Library of Science, vol. 15(9), pages 1-14, September.
    10. Swati Dhingra & Stephen Machin & Henry Overman, 2017. "Local Economic Effects of Brexit," National Institute Economic Review, National Institute of Economic and Social Research, vol. 242(1), pages 24-36, November.
    11. Sandra Bernick & Richard Davies & Anna Valero, 2017. "Industry in Britain: an atlas," CentrePiece - The magazine for economic performance 513, Centre for Economic Performance, LSE.
    12. Roberta Capello & Andrea Caragliu, 2021. "Merging macroeconomic and territorial determinants of regional growth: the MASST4 model," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 66(1), pages 19-56, February.
    13. John Bachtler & Iain Begg, 2018. "Beyond Brexit: Reshaping policies for regional development in Europe," Papers in Regional Science, Wiley Blackwell, vol. 97(1), pages 151-170, March.
    14. repec:cep:spccrr:spdorp03 is not listed on IDEAS
    15. Gioele Figus & Katerina Lisenkova & Peter McGregor & Graeme Roy & Kim Swales, 2018. "The long‐term economic implications of Brexit for Scotland: An interregional analysis," Papers in Regional Science, Wiley Blackwell, vol. 97(1), pages 91-115, March.
    16. Lohner-Moeslang, Kevin, 2022. "New challenges in the area of supply chain risk management: Unpredictable events and their effects," Journal of Applied Leadership and Management, Hochschule Kempten - University of Applied Sciences, Professional School of Business & Technology, vol. 10, pages 60-84.
    17. Naser Makarem & Harjinder Singh & Nigar Sultana & Darren Henderson, 2023. "Policy uncertainty and real activities manipulation: evidence from Brexit," Review of Quantitative Finance and Accounting, Springer, vol. 61(4), pages 1415-1440, November.
    18. Stewart, Kitty & Cooper, Kerris & Shutes, Isabel, 2019. "What does Brexit mean for social policy in the UK? An exploration of the potential consequences of the 2016 referendum for public services, inequalities and social rights," LSE Research Online Documents on Economics 121548, London School of Economics and Political Science, LSE Library.
    19. Moshfique Uddin & Anup Chowdhury & Geoffrey Wood, 2022. "The resilience of the British and European goods industry: Challenge of Brexit," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 31(4), pages 934-954.
    20. Bachtler, John & Begg, Iain, 2018. "Beyond Brexit: reshaping policies for regional development in Europe," LSE Research Online Documents on Economics 86438, London School of Economics and Political Science, LSE Library.
    21. 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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    More about this item

    Keywords

    Brexit; trade; UK economy; UK politics; North and South divide; UK living standards; Local Authorities;
    All these keywords.

    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics

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