EU28 Capital Market Perspectives of a Hard BREXIT: Theory, Empirical Findings and Policy Options
Korus Arthur and
Additional contact information
Xiong Tian: Research Assistant at European Institute for International Economic Relations (EIIW) and at Schumpeter School of Business and Economics at the University of Wuppertal, Rainer-Gruenter-Str. 21, 42119 Wuppertal, Germany
The Economists' Voice, 2019, vol. 16, issue 1, 16
Key aspects covered refer to the cost of leaving the EU and in particular the implications for corporate bond risk premiums in the UK and the Eurozone: The gap between the interest rates of corporate bonds and government bonds could increase in the UK and Eurozone, respectively, as a result of BREXIT where the 2016 BREXIT referendum itself is considered to be a first BREXIT event (see the empirical findings), followed by the main BREXIT event, namely the day of officially leaving the EU – possibly as a No-deal BREXIT. It is as yet not clear what type of BREXIT will be implemented – hard versus soft – and it is also unclear what type of free trade agreement the EU and the UK could accomplish post-BREXIT. However, it is obviously necessary to carefully consider the background of the BREXIT dynamics and to then refer to various versions of BREXIT if one is to understand the inherent politico-economic dynamics of BREXIT – with a No-deal case representing an analytical benchmark which most politicians in the British Parliament obviously would want to avoid; a simple way to indeed avoid this case, with obvious high costs for the British economy, is not easy to discern as the UK’s political system is fractured. If the safe-haven status of the UK should be impaired by BREXIT, the rise of government bond interest rates by 0.3 percent would stand for the same burden as the net UK contribution to the EU.
Keywords: BREXIT; capital markets; credit spreads; FDI; growth (search for similar items in EconPapers)
JEL-codes: F02 F21 F4 G1 G2 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
For access to full text, subscription to the journal or payment for the individual article is required.
Working Paper: EU28 Capital Market Perspectives of a Hard BREXIT: Theory, Empirical Findings and Policy Options (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bpj:evoice:v:16:y:2019:i:1:p:16:n:6
Ordering information: This journal article can be ordered from
Access Statistics for this article
The Economists' Voice is currently edited by Michael Cragg, Dwight Jaffee and Joseph Stiglitz
More articles in The Economists' Voice from De Gruyter
Bibliographic data for series maintained by Peter Golla ().