An import(ant) price of Brexit uncertainty

Alejandro Graziano, Kyle Handley and Nuno Limão

Journal of International Economics, 2024, vol. 152, issue C

Abstract: We estimate the impact of trade policy uncertainty (TPU) on CES import price indices, focusing on the implications of Britain’s exit from the European Union (Brexit). Our analysis reveals that a higher probability of Brexit increases U.K. import price indices by raising the prices of existing products and reducing product variety from the E.U. We find evidence that the risk of higher import protection from the 2016 referendum increased current import price indices by 11 log points. This amounted to a 2 log point increase in manufactured goods prices and a 0.6 log point decrease in consumers’ real income.

Keywords: Brexit; Uncertainty; Prices; International trade (search for similar items in EconPapers)
Date: 2024
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Working Paper: An Import(ant) Price of Brexit Uncertainty (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:152:y:2024:i:c:s0022199624001399

DOI: 10.1016/j.jinteco.2024.104012

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