Exploring Brexit with dynamic spatial panel models: some possible outcomes for employment across the EU regions

Bernard Fingleton ()

The Annals of Regional Science, 2020, vol. 64, issue 2, No 10, 455-491

Abstract: Abstract Starting with a reduced form derived from standard urban economics theory, this paper estimates the possible job-shortfall across UK and EU regions using a time-space dynamic panel data model with a spatial moving average random effects structure of the disturbances. The paper provides a logical rational for the presence of spatial and temporal dependencies involving the endogenous variable, leading to estimates based on a state-of-the-art dynamic spatial generalized moments estimator proposed by Baltagi et al. (Reg Sci Urban Econ, 2018. https://doi.org/10.1016/j.regsciurbeco.2018.04.013). Given reliable interregional trade estimates, the simulations are based on a linear predictor which utilizes different regional interdependency matrices according to assumptions about interregional trade post-Brexit. The results indicate that heightened barriers to trade will evidently cause job-shortfalls both in the UK and across the EU, but it is also shown that there is a considerable amount of asymmetry in the outcomes across regions and sectors.

JEL-codes: C23 C33 C53 E27 F10 J21 R12 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s00168-019-00913-2

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