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Trade-related effects of Brexit. Implications for Central and Eastern Europe

Author

Listed:
  • Jan Hagemejer

    (Faculty of Economic Sciences, University of Warsaw)

  • Maria Dunin-Wąsowicz

    (European Movement Forum)

  • Jan Jakub Michałek

    (Faculty of Economic Sciences, University of Warsaw)

  • Jacek Szyszka

    (Faculty of Economic Sciences, University of Warsaw)

Abstract

We use a global computable general equilibrium (CGE) model to analyze several scenarios of Brexit to assess it on the EU New Member States (NMS) to complement the literature exist. Our scenarios are based on expected outcomes of the negotiations, ie. the Soft Brexit with a limited FTA and a Hard Brexit governed by WTO MFN rules. The shocks imposed on the CGE model include modifications of both tariff and non-tariff barriers. While the former is based on actual tariff data, the latter are estimated using an econometric model for both merchandise trade and services. Our results show the macroeconomic effects of Brexit are mild with a slight decline of NMS GDP of roughly 0.4 % even in the case of a Hard Brexit. However, there are some sectors that may experience somewhat significant drops in output, in particular the food sector and some other manufacturing export-oriented sectors.

Suggested Citation

  • Jan Hagemejer & Maria Dunin-Wąsowicz & Jan Jakub Michałek & Jacek Szyszka, 2021. "Trade-related effects of Brexit. Implications for Central and Eastern Europe," Working Papers 2021-17, Faculty of Economic Sciences, University of Warsaw.
    • Handle: RePEc:war:wpaper:2021-17
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    File URL: https://www.wne.uw.edu.pl/index.php/download_file/6634/
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    JEL classification:

    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • F10 - International Economics - - Trade - - - General
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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