Modelling events: The short-term economic impact of leaving the EU

Jessica Baker, Oriol Carreras (), Simon Kirby, Jack Meaning and Rebecca Piggott

Economic Modelling, 2016, vol. 58, issue C, 339-350

Abstract: This paper presents a framework for modelling important socio-economic events in order to provide an informative counterfactual. This involves mapping the deep underlying shock associated with the event itself into a series of more tractable shocks consistent with the model being applied and calibrated from data, existing literature or ancillary analysis. The results should then be subject to testing of their sensitivity to the assumptions made. As a practical example, the paper uses the National Institute's Global Econometric Model (NiGEM) to consider the short-term economic impact to the UK of leaving the European Union. We find that the UK economy would be around 2 1/2% smaller 2years after a decision to leave the EU when compared to the counterfactual of deciding to remain a member.

Keywords: Macroeconomic modelling; Uncertainty; Risk premia; Investment (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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Working Paper: Modelling events: the short-term economic impact of leaving the EU (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:58:y:2016:i:c:p:339-350

DOI: 10.1016/j.econmod.2016.06.012

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