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Making sense of Brexit losses: An in-depth review of macroeconomic studies

María C. Latorre, Zoryana Olekseyuk, Hidemichi Yonezawa and Sherman Robinson ()

Economic Modelling, 2020, vol. 89, issue C, 72-87

Abstract: Almost all economic assessments of Brexit conclude that there would be significant losses for both the UK and the EU. This paper examines the driving forces behind these results. We consider the strong economic relationships between the UK and EU both at the sectoral and macroeconomic levels that are at risk from Brexit. We review fifteen studies that explore various Brexit scenarios (hard and soft) and explain why their different methodologies and assumptions yield different degrees of economic damage. Our review concludes that GDP losses for the UK from a hard Brexit range from 1.6% to 7.8%, while a soft Brexit would moderate the losses by roughly half. We also find that potential UK trade agreements with third countries could partially compensate for significant Brexit losses.

Keywords: Economic methodology; CGE models; Economic simulation; Foreign trade; Migration; Multinationals (search for similar items in EconPapers)
JEL-codes: B41 C63 C68 F17 F23 F21 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1016/j.econmod.2019.10.009

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