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Local economic effects of Brexit

Swati Dhingra, Stephen Machin () and Henry Overman ()

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper studies local economic impacts of the increases in trade barriers associated with Brexit. Predictions of the local impact of Brexit are presented under two different scenarios, soft and hard Brexit, which are developed from a structural trade model. Average effects are predicted to be negative under both scenarios, and to be more negative under hard Brexit. The spatial variation in negative shocks across areas is higher in the latter case as some local areas are particularly specialised in sectors that are predicted to be badly hit by hard Brexit. Areas in the South of England, and urban areas, are harder hit by Brexit under both scenarios. Again, this pattern is explained by sector specialisation. Finally, the areas that were most likely to vote remain are those that are predicted to be most negatively impacted by Brexit.

Keywords: Brexit; EU and UK; local economic impacts; trade models (search for similar items in EconPapers)
JEL-codes: J1 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-geo, nep-int, nep-lab and nep-ure
Date: 2017-10-31
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Published in National Institute Economic Review, 31, October, 2017, 242(1), pp. R24-R36. ISSN: 0027-9501

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http://eprints.lse.ac.uk/85602/ Open access version. (application/pdf)

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Journal Article: Local Economic Effects of Brexit (2017) Downloads
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