EconPapers    
Economics at your fingertips  
 

Modelling the long-run economic impact of leaving the European Union

Monique Ebell, Ian Hurst and James Warren

Economic Modelling, 2016, vol. 59, issue C, 196-209

Abstract: We model the long-term implications of leaving the EU for the UK economy using NiGEM, the National Institute's large scale structural global econometric model. We examine a scenario in which the UK has no free trade agreement with the EU, focusing on four key shocks: a permanent reduction in the size of the UK's export market share in EU member countries, an increase in tariffs, a permanent reduction in inward FDI flows and the repatriation of the UK's projected net contributions to the EU budget. We calibrate the size of the shocks on a synthesis of the academic evidence. We explain how each of these four shocks is implemented in NiGEM, as well as examining the key mechanisms by which they are propagated through the model. The export market share channel is the main mechanism by which leaving the EU leads to declines in GDP and consumption relative to the long-run baseline, accounting for a long-run decline in GDP of 2.1% relative to the baseline value, out of a total projected reduction in GDP relative to the baseline of 2.7%.

Keywords: Free trade agreements; International trade; Foreign direct investment; NiGEM (search for similar items in EconPapers)
JEL-codes: E17 F13 F17 F40 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (28) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0264999316301833
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Modelling the long-run economic impact of leaving the European Union (2016) Downloads
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:eee:ecmode:v:59:y:2016:i:c:p:196-209

DOI: 10.1016/j.econmod.2016.06.020

Access Statistics for this article

Economic Modelling is currently edited by S. Hall and P. Pauly

More articles in Economic Modelling from Elsevier
Bibliographic data for series maintained by Haili He ().

 
Page updated 2020-11-23
Handle: RePEc:eee:ecmode:v:59:y:2016:i:c:p:196-209