Quantifying Brexit: from ex post to ex ante using structural gravity

Gabriel Felbermayr, Jasmin Gröschl () and Marina Steininger
Additional contact information
Jasmin Gröschl: ifo Institute, LMU & CESifo
Authors registered in the RePEc Author Service: Jasmin Groeschl

Review of World Economics (Weltwirtschaftliches Archiv), 2022, vol. 158, issue 2, No 2, 465 pages

Abstract: Abstract Exploiting changes in the geography of economic integration in Europe, this paper quantifies the effects of Brexit from ex post to ex ante using structural gravity. By isolating the directional treatment effects of EU agreements for the UK, the analysis reveals important heterogeneity across agreements, sectors, and within pairs. We find that these directional effects matter for the size and distribution of the welfare effects of Brexit—the withdrawal of the UK from EU agreements resulting into a return of trade costs to the situation quo ante. We make this point with the help of a modern multi-sector trade model that is able to capture inter- and intranational production networks. In line with other papers, the welfare costs of Brexit are higher in the UK than in most other EU countries. However, heterogeneity tends to attenuate overall costs while giving rise to substantial heterogeneity between EU27 members and sectors. A scenario that could shift bargaining power eliminates asymmetries in the costs of Brexit as soon as the UK fully liberalizes its market.

Keywords: Structural gravity; General equilibrium; Treatment heterogeneity; Brexit (search for similar items in EconPapers)
JEL-codes: F15 F17 N74 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://link.springer.com/10.1007/s10290-021-00436-z Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
Working Paper: Quantifying Brexit: From Ex Post to Ex Ante Using Structural Gravity (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:weltar:v:158:y:2022:i:2:d:10.1007_s10290-021-00436-z

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/10290/PS2

DOI: 10.1007/s10290-021-00436-z

Access Statistics for this article

Review of World Economics (Weltwirtschaftliches Archiv) is currently edited by Paul Bergin, Holger Görg, Cédric Tille and Gerald Willmann

More articles in Review of World Economics (Weltwirtschaftliches Archiv) from Springer, Institut für Weltwirtschaft (Kiel Institute for the World Economy) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().